Like picking a good doctor, choosing a property investment advisor is all about assessing experience and credibility. You want to trust your advisor is working in your best interests and you won’t end up buying a property worth less than you actually paid for it. So how do you sort the good from the bad in an industry known for its spruikers?
1. Property recommendations based on research
When your advisor recommends a property, you can see evidence it comes from the open market not a stock list of ready-to-buy properties. Your advisor explains the research method behind choosing these properties, including information about how they track the market and what factors they use to determine the best investment locations. Free property advisors who receive pay from developers or sales agents will only offer up the properties they’re paid commission on. This means they’ll only ever show brand new builds and refuse your suggestions to consider existing homes.
2. Their fees are transparent
They offer you a documented schedule of fees that outlines what their fees include and how long their advice lasts. When you ask if there are any other related commissions they might be receiving, they are happy to answer.
3. Clear outline of risks
Your advisor should explain the risks in detail. If they offer incentives or tell you that property investment is a guaranteed money spinner, there’s little doubt they’re pushing their own agenda.
4. Lots of questions
Are you asked plenty of questions about your financial situation, your objectives, and future plans? Expect to receive a personalised investment plan based on your individual circumstances and risk profile. If the advisor hasn’t asked you many questions, yet still offered a plan, you know it’s a plan used for all investors.
5. You aren’t made to feel rushed
A good investor understands the enormity of the decision to invest and doesn’t try to get you to act or sign up right away. You should feel comfortable asking as many questions as you need without feeling like you’re being a nuisance. Spruikers will usually try to close the sale in the first meeting.
6. Strong experience and qualifications
Their qualification comes from a reputable source such as a university or TAFE. They should be members of a recognised industry association, such as Property Investment Professionals of Australia. Your advisor has been doing this work for a long time and will happily provide names and contact details of clients.