While I don’t have reference to where this statistic came from, I was chatting to a colleague the other day, and she mentioned that out of a population of 25 million people in Australia, 45,000 claim to be property experts!
The more people I speak to, the more scepticism and negativity I’m hearing around this concept of property gurus.
It has become common knowledge now that, historically, the property industry has been guilty of hiding significant commissions into properties sold to everyday investors.
So, I don’t want to create any controversy with this discussion. Still, I think it’s important to discuss the importance of knowing how to tell whether a person is a good property investing practitioner or whether you should be wary of them.
You Can’t Expect Motivations to be Pure
The truth is that you can’t expect people to be agnostic and give independent advice.
Whether we’re talking to property people, financial planners or insurance brokers, if that person has a vested interest in selling you a particular piece of real estate because they’ll get money from elsewhere – that clouds the waters.
Whether that person has good intentions or not, you can’t expect that their motivations will be entirely pure.
Finding the Right People to Rely On
But, the truth of the matter is, you can’t do it on your own. You need a trustworthy team of people to help guide you in your wealth creation journey.
If you’re going to try and do it yourself, two things are going to happen:
- you’re going to have to go above and beyond in terms of your education and finding the correct information to help you understand a particular strategy and how to avoid the pitfalls; and
- you’re going to have to work super hard to find access to good opportunities.
Finding people who have done the time and worked hard to have access to good opportunities is incredibly valuable.
So, what I wanted to address today is how to pull apart this whole idea of finding the right people to rely on when you’re trying to grow your wealth and build your property portfolio.
Asking the Right Questions
One of the best things you can do is learn how to ask the right questions.
You need to learn how to do due diligence on the people you intend to rely on – ask the pointed questions upfront so that you can relax and feel comfortable with the advice and recommendations made to you.
Some examples of this include:
- invest with people who have a proven track record – ask them whether they invest in the things that they advocate and how much they invest (it’s a huge red flag if they don’t actually invest in property themselves); and
- learn to tease apart their theoretical knowledge from their hard-earned knowledge gained from being in the field and doing the deals themselves (it’s easy to regurgitate general calculations, but how does that apply to someone’s personal situation?).
Not Every Strategy is Going to Work
Every property expert should have a skill recognising that not every strategy will end up being a fit for every person.
One of the things that I’ve witnessed as a practitioner is finding that mum-and-dad investors or new investors end up purchasing properties that they should have never touched because they weren’t experienced enough, or the property simply didn’t align with their goals.
Now there’s a lot of generic property out there, but there is equally a lot to consider, including:
- alignment of strategy, property and personal goals;
- risk appetite;
- education; and
- how much time and energy you have.
So, when you’re looking for investing practitioners to support you on the journey, it’s super important that they also consider those things.
Anyone who ends up telling you that the property or the product that they sell is a fit for everyone is naive – so be mindful of that.
Looking from a Micro Perspective
You also want to work with people who are going to look at things from a macro perspective on what’s happening economically as well as from a micro perspective:
- Are they aware of trends in different parts of the country?
- Are they aware of trends across different sectors of the real estate market and different types of product?
- Can they identify, from a prospect’s point of view, what the pros, cons and risks are?
I’ve literally met hundreds and hundreds of investors who have purchased something in an alleged “up and coming” area, and then the property ends up doing nothing – it has fallen flat. It hasn’t had the growth that the glossy brochure advertised.
There is no question that the property industry is wealthy. Some people are earning great money from selling real estate. So, it’s pretty easy to get misled by glossy brochures and fancy presentations that make something look and sound great.
“Property Clubs”
I recall a property club at one point formed on the pretence that they were going to try and get economies of scale, negotiate, and get better deals.
When in actual fact, they were just glorified salespeople who were selling their product to the highest bidder. Whoever paid them the best commission got their products pushed to the front of the sales line and put in front of the property club members.
You need to be smart enough to ask the questions about how they found the deals and whether they’re receiving commission, for example.
Final Thoughts
I’m pretty shocked by the idea that such a significant portion of our population regard themselves as property experts.
I’m not saying that I’m the be-all and end-all when it comes to investing – there are certainly more successful investors out there.
But what I would say is that I’m measured and have become very mindful of asking questions before undertaking any investments – mainly because I’ve experienced being ripped off and sent in the entirely wrong direction.
You have to remind yourself that property, particularly in this country, is super expensive to get into and super expensive to get out of. So, every investment you undertake, whether you’ve got an incredible business income or not, matters.
With the way that the economy is going, you can’t afford to carry lemons. I mean, you can’t afford to carry lemons at any point, but particularly now – think twice about who you’re going to rely on and why.
Use that as your compass to make decisions about who you align with because you want to find relationships that will endure over the long term.
I hope this has been helpful! I’m certainly not trying to discredit anyone. I just want you to be aware that not everyone has the best intentions, and I don’t want people making the mistakes that I ended up making early on in my journey.
If you’re interested in understanding how to create wealth through alternative strategies, please check out my programs, where I help you catapult your investment income and blend strategies to shave decades off your timeline to financial freedom.
Or, you’re welcome to get in touch today, book a call with me, and I would be happy to talk you through it – no obligation!
