If you wanted to win the AFL premiership, you wouldn’t pick the bloke playing B-grade in the local amateur league to be your captain. And yet in property investment, this is too often the case. More than 90 percent of property investors own only one property and over half of them sell up within the first five years, never to invest in property again.
Why? To return to our footy analogy, these investors are using part-time, B-grade athletes to try and win a premiership at the highest level. They try to do it all themselves, or rely on under-qualified ‘mates’. The problem is - successful property investment is an elite team sport, not a DIY project.
Building the property investment A-Team
So let’s pull out the whiteboard and start putting the team in their positions. Make sure everyone who is considered for selection is a proven, independent professional. To trot out another sporting cliché, a team is only as good as it’s worst player. And that player should be you. Surround yourself with proven professionals who are elite at what they do.
Start with the team manager, your Property Investment Advisor. This is a leadership role, so only pick the best. The Advisor should be a member of Property Investment Professionals of Australia, a peak body that holds their members to the highest standards, and should have a track record of success.
Your panel of master coaches should include a savvy finance broker, accountant and financial planner. Property is a game of finance, so engaging the right broker and finance professionals is critical to your capacity. The on-field leadership group should include a project manager (if you’re building), a Buyer’s Agent (if securing an existing property), a property manager and quantity surveyor.
The team manager, coaches and leadership group oversee the on-field team. These key position players include the real estate agent, conveyance/solicitor, builder, building inspector and surveyor.
Team culture: The 5 T’s in Trust
Before you lock in your squad, identify the key attributes of an elite team player. This is how you develop a winning culture, which is as much about trust as it is about skill.
1. Talent (temperament or character)
Don’t worry too much about a company brand or reputation, find out who will be doing the actual work. What is their relevant experience or expertise? How busy are they, and do they have the time to give you top service? How will they communicate with you?
2. Tangibles (competence)
Understand the level of the professionals’ personal experience with property investment. Find out if they have runs on the board, so to speak, with their own investment properties or a track record of having secured the type of properties you’re looking for. Ultimately, do they walk their talk? If not, drop them from the squad.
3. Trade (calibre and expertise)
Get the facts. How many years have they been working in property and how many clients have they worked with? And don’t just take their word for it, talk privately with a number of past clients and understand the good, bad and ugly experiences.
4. Tax to you (cost)
Get clear on pricing and payments. This includes how much, how and when they get paid. Do they offer fee for service, cost per job or value based services? Are they receiving any referral payments or commissions? Importantly, are they cost effective? Remember, a ‘cheap’ professional could take twice as long to complete their job, and you could get what you pay for in quality.
5. Touch (ties or connections)
This is about building long-term relationships based on respect and trust. So not only must the professionals be the best at what they do, they also must be likeable. If you get this right, this will be your team for the next 10 to 20 years and you’ll set yourself up for an era of success.
It’s a big team sheet to fill, but picking the right players is the most important role in property investment. Your network really does equal your net worth.
Bushy Martin is an award-winning property investment specialist and author of ‘The Freedom Formula’, which shows readers how to live more and work less by replacing their income through property. Find out more at www.khgroup.com.au