Investment Advice Series - Part 2

SURROUND YOURSELF WITH KNOWLEDGEABLE EXPERTS..

A natural consequence of Tip 1 last month (“Have a clear Strategy”) is to actually discuss your strategy with people who have done it and can help you.

These could be:

• Fellow experienced investors. Make sure you understand how they did it.
• Professional Investment experts/mentors. They are estate agents specialising in investment properties. They can save you a lot of time, money and frustration if they are good. Avoid the pushy ones, and do not hesitate to interview them thoroughly to ensure their integrity. The competent ones will help you with your investment strategy, loan structure to optimise taxation, etc... and the chosen one should become your key sounding board on an ongoing basis.
• Mortgage Brokers/lenders

As the loan structure is crucial to your strategy, it is usually wiser to find a good mortgage broker who is also an investor, rather than go directly to a bank. This is because banks will sell you their own product only, and they will usually not know about what structure you need. They have also an annoying habit of cross collaterising your properties (ie all loans secured by all properties in a big bundle) so that you become a “sticky” customer, ie it becomes hard for you to extricate yourself from this bank should you so wish.

Accountants. They need to give you the green tick on your strategy and structure from a tax point of view. Finding a good one makes all the difference, so chose wisely.

Lawyers/conveyancers.

You need a good lawyer too, to ensure that there are no onerous clauses in your purchase contract. Usual issues are relating to the conditions and timing of the unconditional date, strata/body corporate by-laws... Their job is to make sure that you fully understand all the risks associated with the contract.

Next month we will look at the most important tip: Know your numbers!

In the meantime if you have any questions or want to discuss your situation, just contact me at philippe.brach@multifocus.com.au

or 1300 266 350