One investor his property investment journey at age 30 with $120,000 in savings, no debt, a secure job, but no financial team to help him along his journey. One expert shares how he needs an "investment property savvy" accountant, and to avoid transaction accountants at all costs.
However, this process of building a team is not an easy task. Like most budding property investors, Smart Property Investment Show listener Tom Topher asks, "Where do I begin to look?"
According to buyer's agent Paul Glossop, one starting point could be the unbiased recommendations from property investors or field experts and professionals who have had time to get to know a number of accountants throughout their journey or careers.
"When it comes down to trying to figure out who's gonna be the best accountant from a property investment [perspective]... try to get nonbiased advice from people who either work in the industry or have some sort of skin in the game in that industry, [those who] don't have any incentive for giving you the recommendation... and then [let them substantiate] why that person is going to be the right accountant for you—certain things such as they've been investors themselves," he said.
It's also important to avoid "transaction accountants" and find those who can be readily available for you with relevant advice and information that could help you move your investment journey further forward. After all, time is as important as skills and expertise when looking for a mentor who can help you realise and achieve your investment goals.
"You want a relationship, and if they can't afford the time to give it you personally, I'd say, even if they're really good at what they do, they're probably not the right person for you[;]... you just won't get enough time in front of them to get the information you need to make you better," Paul explained.
"Time, and also access to them as a readily available aspect.
"On top of that, [if the] fees are—if I had a list of 100, fees would be number 99. I would always pay far, far more for somebody who's going to give me very, very sound advice. If you're starting to price them based on what they're charging you for what they do, I think you're starting in the wrong order."
More than stressing over the fee that an accountant may charge you, Paul believes that understanding them as a person will benefit an investor more in the long run.
"[Thinking about] what they're worth in the long term—when you talk about things such as capital gains tax on properties... when you should sell, what year you should sell. The difference of what that's going to make will potentially be tens, if not hundreds of thousands of dollars, in that ten-, twenty-, thirty-year time frame. So, the fee side of things, I think, please disregard that. Really [understand] them as a person," Paul stated.
"How long they're gonna be around for is another thing that I think people don't necessarily think about... Tom's 30, he's going to invest in for thirty years. I'd want someone who's probably going to be in the game for at least ten to fifteen years to be able to give me the right advice for that time so they can impart their knowledge."
Lastly, property investors must look out for accountants who have also spent years creating wealth through property.
While it is not a requirement for good accountants to be property investors themselves, having that experience can help them give more sound advice to their clients not just in terms of tax and other accounting information, but also on buying, developing, renovating and other aspects of property investment.
"There's a multitude of things you can do in property as far as buy[ing], develop[ing], subdivid[ing], sell[ing], renovat[ing], flip[ping], etc. If they don't have experience in the implications on tax for each one of those and [in giving] state-based examples of how and when and what they've done over the years, [and] how that relates to them, then it's hard for them to be able to give you the best advice," Paul said.
He concludes by saying that "I personally would put that at a higher priority [if they are] investors. And not just one property, or two properties—that they've been investors for a period of time and they understand the different markets and what they need to be aware of... non-biased advice, [that would be] perfect."
Tune in to The Smart Property Investment Show's Q&A session with Paul Glossop to know more about mortgage lenders, the ins and outs of first home owners' grants, money management platforms, and much more.