While investors remember to do their due diligence on the property they're considering, many forget to do the same on the expert they're thinking about using.
We're all for property investors asking around for advice and finding experts. However, not all experts are made equal.
At Smart Property Investment’s recent Roundtable, editor Phillip Tarrant facilitated discussion by explaining that the reason the Property Investment Professionals of Australia (PIPA) organisation was an attractive concept was the advocacy of “due diligence, research, surrounding yourself with professionals who can actually help you make more informed and smart property investment decisions.”
“The challenge I think PIPA has in the wider industry is this whole idea of regulation legislation. Where brokers and financial planners have a framework to worth within, it doesn’t really go up to the property investment industry. So anyone can offer property investment advice.
“Yes, a lot of people do have some education an experience, some may be a real estate agent or a mortgage broker, but there’s no formal qualification which property investment professionals can aspire to until PIPA brought in the QPIA (Qualified Property Investment Adviser).”
Propertyology’s Simon Pressley agreed with this. “A lot of property investors are influenced too easily by mortgage brokers, accountants, solicitors, people that probably have a certain degree of status, but they probably don’t know more about property than the mechanic,” he explained.
For this reason, in the current environment it’s more important than ever to know what to look for and how to navigate the advise minefield.
This may include asking them which associations they are accredited with, such as PIPA, REBAA or other industry bodies, as well as asking them for clarification about their qualifications.
Stuart Zadel from TGR seminars explains that you need to be aware when offered free advice and education.
“[Many companies] make huge commissions on the investment properties they market or sell to you off developers. Are they working in your best interest?
“Maybe, maybe not,” Mr Zadel says.
He suggests the following questions should be asked to ensure they are dealing with someone reputable:
- What results have you achieved? How can these be verified?
- What results have your clients/students achieved? How can this be verified?
- How long have you been doing this strategy?
- How have you made your money?
- When did you make your money?
- Have there been/or are the proposed any government legislated changes that would affect this advice/strategy today I should be aware of?
- If I was to follow your strategy/advice, 5 years from now, what is my likely outcome/position?
Real Wealth Australia’s Helen Collier-Kogtevs also has a number of questions she suggests investors ask.
- Investors need to be ensuring their sources of advice can answer the following satisfactorily:
- What size and type of portfolio do you have?
- What kind of one-on-one support do you offer?
- What resources and tools will you provide?
- What type of strategy do you teach (is it ‘one plan fits all’ or tailored to my specific situation)?
- How will I benefit from your experience and mistakes you have made in the past?
At the end of the day, with the responses given, you need to make your own decision.
What questions and checking procedures do you go through to ensure you’re dealing with the best operator? Let us know: [email protected]