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Who do you ask for property advice?

With so many mixed messages and conflicted interests, who can you really trust? And in today’s property markets, there are very few advisers who have the perspective of having lived through and successfully invested in a number of property cycles and understand how to take advantage of the is the current stage of the property cycle as we emerge into a new strongly positive wave.

Yet there is a new breed of so-called property experts or property Gurus emerging.

What’s the threshold for being able to call yourself an expert?

Usually, experts have years of experience in their chosen profession.

They’re at the top of their industry, and they shape the path of progress.

And yet, there’s no shortage of so-called “property experts” and buyers’ agents whose only real experience seems to me they’ve done a short course like the one we offer, or ridden the most recent property boom and really love property.

In our views they are glorified sales person or a property spruiker.

The rise of these so-called “advisors” coincided with the practice of personal branding on social media.

While social media has undoubtedly created fantastic opportunities for real experts to connect and share their knowledge, it has also opened the floodgates for a tsunami of self-titled “property experts” looking to flog their books, consulting sessions, their success recipe and training programs, or online courses.

Social media has allowed these so-called experts and gurus to market their client/or their own success stories that are deceptive and orchestrated. You generally won’t find genuine reviews on their operations. The reviews and quite often fake stories that are highly managed and promoted by themselves. Each of these experts are connected to hundreds of other experts and they all support each other by putting positive comments on social media posts thereby giving a false perception of success to unsuspecting consumers.

But, since most property investors fail to achieve the financial freedom they deserve, and with less than 8% ever owning more than 2 properties, a better question to ask would

Who could you ask for property investment advice?

Here are the people you could turn to:

1. No One— many beginning investors think they understand real estate because they’ve lived in or rented a home or an apartment.

That’s a big mistake and probably one of the reasons around fifty per cent of first-time investors sell up within five years.

While they may know their local neighborhood, that’s very different from understanding the property market.

2. Friends or family— I understand people may do this, but the question to ask is: are they, financial experts?

How many millionaires do you have in your family? If not, don’t ask them because often their advice will be to avoid property investment because of the “risk.”

3. A real estate agent— Remember agents work for the vendor to help them achieve the best price, and they’re unlikely to tell you about the other great properties for sale in the area by other agents. It’s illegal if they do not look after the vendors interests.
4. A mortgage broker— While it’s important to have an investment savvy mortgage broker on your side helping you through the finance maze, most don’t understand the property market well enough to advise on what is an “investment grade” property or how to do the market research.
5. An accountant— your accountant should advise you on tax matters and structuring, but most don’t have the intimate knowledge of the property market required to give investment advice. The ones who have grey hair and have an investment portfolio may be useful.
6. Financial planners—

   Financial planners are excellent at formulating a wealth strategy. Financial planners are licensed to sell financial products, most are not able to advise on real estate. Financial products are structured in way the financial planner often derives fee or commission from the product. The products they sell are from their “investment list.” approved by their licensee. Residential investment properties are usually excluded from the approved list. So even if they know property can be good investment they are contractually and legally not allowed to advise.

7. A property marketer— while these salespeople may seem to be on your side, they’re really selling “product” for a property developer who is most likely going to make the biggest profit out of the deal.
8. Investment seminars and workshops— Ask yourself: Is the person conducting the event an investment expert in their field?

How long have they been financially secure, or do they make their money teaching others?

9. A property mentor/course provider or a Youtuber —There seems to be an abundance of property mentors around — some who give great guidance, while others are really property sellers or marketers in disguise.

Let’s make it clear: It’s important to have mentors. They see your blind spots, give you guidance and support and expand the way you think. Just be careful who you choose and ensure they have achieved the results you want to achieve. A warning the condition of market and rules changes, and what worked previously may not work in the same way in future.

10. A buyer’s agent— These can be a great help in selecting the right property but most are just “order takers” — they don’t devise a plan that takes into account your family’s future needs and your risk profile or are skilled and knowledgeable to device strategies. To be truly able to devise a plan and strategy one need to know about tax and mortgages and be trained in financial and estate planning.However, when you look at this list you can now see why you need… an independent, unbiased property adviser or strategist.The reality is that if your advisor has worked in one or all the above profession there is a good chance you that his/her advice would be more reliable.

In any case, it is critical to have a trusted advisor when making property investment decisions.

It’s just too hard to do it on your own or by trial and error. There’s a huge learning fee involved — of time, money, effort, and heartache.

We find it interesting that while most wealthy people have, and are prepared to pay for, trusted advisors in many areas of their lives, the average person has no advisers or they get their advice from salespeople who they perceive as advisers but are far from independent.

On the other hand, following the teachings and proven systems of those who’ve already achieved what you want to achieve and who’ve retained their wealth through a number of property cycles, while not guaranteeing your success, makes it much, much more likely.

What do property strategists/property investment advisers actually do?

We see our role as a property advisor as helping our clients grow, protect and pass on their wealth using property as a vehicle.

While people come to the team at P16 for property advice, in fact, they’re really coming for something else.

Some are looking for financial freedom; others for more choices in life like working because they want to, not because they have to; and yet others want to leave a legacy for their family or the community.

So, property is really just the vehicle they’re keen on using to achieve their end goals.

While most property advisors come from a real estate sales background, the property strategists at P16 are not only experienced property buyers but have a  substantial experience as a financial planner, banker, tax accountant and investment analysis while also being successful investors themselves.

You see…at P16 our property strategists’ job is not to sell clients’ properties, but to help them safely increase their wealth over the long term.

Sadly, today many people call themselves property “advisors” or “strategists”, yet quite a few are thinly disguised salespeople, or are not really qualified to give in-depth advice.

To be truly able to devise a plan and strategy one need to know about tax and mortgages and be trained in financial and estate planning.

So, let’s look at what a good strategist can and can’t do…

Things a good property advisor should do

1. A good advisor will first start by getting to know their clients’ hopes and fears and then be future-focused to help them achieve their long-term financial goals.
2. With so many mixed messages about property investing out there (many coming from parties with vested interests), a good property advisor will help remove his client’s anxiety by simplifying the complex.

They will provide clarity around the complicated world of wealth creation which involves much more than just property — but includes finance, tax, economics and the law. They will advise their clients about the risks as well as the rewards of property investment.

3. While most buyers’ agents or property salespeople are transactional and think of the current “sale” or purchase, a professional property advisor will aim to develop a long-term relationship and help their clients understand the next two or three steps even before taking the first step.

A good property advisor will “sell” advice, not a product or a property. They must be able to formulate wealth strategies that a financial planner is trained in. Investment strategy alone won’t help you to create wealth.

That’s why at P16 we always start by building our clients a Strategic Property Plan. We are qualified and trained financial planners. Planning is bringing the future into the present so we can do something about it now.

4. Many clients come to a real estate advisor looking for the next big thing — some are looking for a shortcut, or the next hotspot, or a way to get rich quickly.

Instead, a qualified property strategist will stop their clients from speculating by recommending proven strategies that have always worked.

5. A good independent advisor will not have any properties for sale, but will have a list of potential options and refer their clients to a buyer’s agent who is part of their team to find the best opportunity in the market to suit their client’s budget, plans and risk profile.
6. A strategic advisor will never put any pressure on their client to make an investment decision, but their knowledge, research and experience will help their clients select an investment property that is the highest and best use of their funds, and one that will work hard for them over the long term.
7. A wise property strategist/advisor will help their clients avoid the big mistakes made by the average investor and will earn their fees simply by helping their clients avoid the devastating errors made by many investors such as those who lost significant amounts of money by investing in mining towns, regional locations, house and land packages or off-the-plan properties.

Of course, a great advisor will do a lot more than that for their fee.

8. By being a student of history, a good strategist will be able to provide perspective, insights, and often optimism at a time when the media is being pessimistic, and vice versa.
9. They will also advise their clients to invest their money the way they do themselves — they must be experienced investors — not enthusiastic amateurs.
10. A good strategist will regularly meet with their clients to objectively assess the performance of their property portfolio and ensure they are heading in the right financial direction.

As you can see — it takes years of learning, experience, and the perspective that only comes from investing through a number of property cycles to become a great property strategist.

Some things a property advisor CAN’T do

As you read on, you’ll find that some property “advisors” will claim to be able to do some of the things on the following list — things they really can’t do.

I guess they tend to do this because they’re not able to deliver on many aspects on the list above — the things skilled, professional advisers can deliver.

1. Even a good advisor cannot always predict the future. They won’t be able to tell you how the market will perform, what will happen to interest rates, or what capital growth rate a particular property will achieve.
2. They won’t be always able to find the next hot spot for you, yet many so-called advisors suggest they can. In essence, they give their clients what they are requesting, rather than what they need — sound, solid advice.
3. Even the most qualified advisor won’t be able to pick the best time to purchase an investment property other than to remind you that the best time to invest was 20 years ago, and the second-best time is today.
4. A good advisor won’t be able to help you get rich quickly or achieve extraordinarily high returns without taking on extra risks.
5. 5. P16 merges tax, mortgage and financial planning with suburb research to invest wisely and build wealth.

Property Strategist/Advisor vs. Regular Buyer’s Agent

What is the difference between a property strategist and a buyer’s agent?

There is a big difference, even though many buyer’s agents will play this down, suggesting they are the right person to help investors.

We believe it’s important to have both as part of your wealth creation team. Or, better still that both can be done by a single person.

Your property strategist will look at the big picture and formulate a strategy that makes sense to you after considering your current position, your aspirations, your time frames, your budget and your risk profile. It involves planning for mortgage, tax, risk and not just investment.

If the mortgage is not planned you may hit the limit of your borrowing capacity early and if tax is not planned you may end up paying more tax.

To be truly able to devise a plan and strategy one need to know about tax and mortgages and be trained in financial and estate planning.

At P16 our advisors are not only experienced in buying hundreds of properties but are also experienced in financial planning, mortgage, tax planning and investment markets having worked as a financial planner, banker, broker or tax financial panner previously and

Buyer’s agents are order takers — they will fill an order given to them to find you a property and will be biased towards the areas they have expertise in, but this may not be in your best interests.

In a hot market desperate and lazy buyers’ agent will sell you off market properties for which you could overpay by as much as 25%. Think about it, would you sell a property off market unless you are getting at least 10% more than the market appraisal.

On the other hand, only a property strategist has the expertise to design that “order” to suit your specific needs.

They will be your long-term wealth creation partner, reviewing the performance of your property portfolio, and will provide recommendations on any opportunities as well as when it’s best for you to do nothing.

A good property strategist is with you for “life” — your buyer’s agent shouldn’t be!

How do property advisors make money?

How we get paid depends upon the services our client requests.

Either way, at P16 our fees are always disclosed in full before we start working with a client and we take no commissions from vendors, salespeople, or developers — so there are no vested interests or bias in what we recommend.

Some of our clients pay a fee for service for a strategic wealth plan, while others pay a success fee after we research, source, negotiate for and secure an “investment grade” property for them. Most hire us to do the both. Please check out P16 investing tab.

Is it worth paying for property investment advice?

That’s a good question as you need to find someone who’ll give you unbiased advice which is independent of any particular location or property.

On the other hand, a trusted advisor tailors their recommendations to your personal circumstances and warns you of the risks as well as the rewards.

Their advice is not biased by any property, products or services to be sold, so they will have their own team of on-the-ground buyer’s agents in a number of states.

Not ones that fly in and out and think they’ve nabbed a bargain, while in reality, the locals know they haven’t.

So, one of the first questions I’d ask a potential advisor is “How are you getting paid?”

This will reveal a lot.

If they are offering free advice, or they are being paid by a third party (such as a developer or property vendor) then the advice cannot be independent.

Put simply, if the advice is free then you are the product!

Your adviser should be qualified preferably in financial planning, or mortgage broking or tax and be an investor themselves.

In any case, they should have a thorough understanding of not only property, but also finance, economics, and the taxation system as far as it relates to real estate investment.

Similarly, your advisor should have no properties for sale, should have a number of investment options available for you depending upon your circumstances, should not make any recommendations at the first meeting, and should not create a “sense of urgency.”

It’s interesting…all the successful investors and business people I know are prepared to pay for professional advisors in various categories of their life.

On the other hand, most unsuccessful investors get no advice or “free” advice and then wonder what went wrong.

Of course, at face value, professional advice can appear to be expensive, given that there is so much free advice available.

You know… free advice from the real estate agent — but they’re getting paid by the seller, or from the property marketer selling off-the-plan apartments or house and land package but they’re getting paid by the developer (and often quite handsomely.)

That’s why in our view, you should only be taking advice from someone who doesn’t have a vested interest in the outcome and therefore is working in your best interests.

Financial Planner vs Property Advisor

If I already have a financial planner, do I still need a property advisor?

The simple answer is most certainly yes, you do need to speak with a property strategist because most financial planners are unable to advise on residential real estate as an investment class.

While financial planners are good at is formulating a wealth strategy, it is a real shame as many Australians go to a financial planner seeking advice on the best investment options for their financial future, yet their planner is not going to point them towards property because their license does allow them to.

If you want guidance on your wealth creation options, you’d be much better off seeking advice from an independent property strategist who has a financial planning background but does not work as a financial planner.

These experts will help you search for a property with growth potential, whilst also helping you to evaluate potential purchases and negotiate with sellers.

Property Investment Advisor vs Spruiker/Gurus/Youtubers

How much does a project marketer (property spruiker) make when they sell a buyer one of their ‘recommended’ properties?

Property Gurus often run their business models using social media channels where the followers are managed like a cult. Some sell overpriced property investing course. There is a ‘group thinking’ amongst the followers and if your views are not aligned to the group or are threat to the group you are removed from the group. Therefore, the group blindly follows the guru who as the history will tell us that they come and go while always leaving destruction when they go.

Property Spruikers generally work for developers. At P16, we often receive unsolicited offers from developers and project marketers asking me to recommend (read: sell) their properties to our clients while we’ve never sold this type of property or received this type of commission, but because of our large database of clients at P16.

We have been offered a 5% commission just to pass on a name (not even to make a sale) —but commissions are often closer to 8% or 10% and I’ve been offered as high as 12%.

This plus the other marketing costs are built into the price the unfortunate investor pays for these properties.

Are you wondering how you should invest in this interesting phase of the property cycle?

If you’re like many property investors, you’re probably wondering what’s the right thing to do at present.

Should you buy, should you sell, or should you just wait?

You can trust the team at P16 to provide you with direction, guidance, and results.

Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s exactly what you get from the experienced team at P16.

We help our clients grow, protect and pass on their wealth through a range of services including:

1. Education (P16 Tutorials): Enrol in our course to boost your confidence and chances of success.
2. Coaching (P16 Coaching): Allow you to have a coach on your side while you do it yourself. This can be very rewarding and will allow you to control, learn and master property wealth creation process.
3. Strategic property advice (P16 Investing) – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!
4. Buyer’s agency (P16 Investing) – As Australia’s most trusted buyers’ agents we’ve experience of helping hundreds of people create wealth and we can do the same for you. Although our head office is based in Perth, we also have on the ground support in Melbourne, Sydney, Adelaide and Brisbane.