Rather than allowing investors to simply stay in the background, having an investment team is all about learning to become more efficient and effective in the business of wealth-creation. How can you be an active investor through your team of experts?
Property investor Luke Moroney, who has successfully built a 30-property portfolio in less than two decades, credits a huge part of his success to the guidance offered by his investment team.
His relationships with property experts and professionals allowed him to grow as an investor, so much so that property investment has become a ‘way of life’ through the years.
“I don't mind getting on the phone and having a conversation with my mortgage broker or my property manager. On average, per property, I'll probably spend somewhere between 15 to 30 minutes a month,” Mr Moroney highlighted.
Having a reliable investment team with him throughout his investment journey has been critical to his success and, as such, every single professional he’s worked with has been worth their weight in gold, according to him.
Aside from sharing their knowledge and expertise to guide him in making the right investment decisions, they have also given Mr Moroney the opportunity to maximise the use of his time, which he describes as a great commodity in property investment.
The property investor said: “If you're running a business, you want to have experts who are going to help you along the way. I think the commodity that we keep forgetting about is time. You've got to think about having other people help you out with finding properties, finding loans, manage your portfolio—those who are actually doing this on a daily basis.”
“They're in there for a reason. They've got the experience. It kind of works as an insurance policy for you when you have experts working on your portfolio every single day,” he added.
At the end of the day, knowing that he’s backed up by a reliable investment team gave him the confidence and motivation to thrive in the wealth-creation venture despite the initial lackluster performance of some of his properties as well as the ever-unpredictable movements of the market.
Among the first experts that Mr Moroney recruited to his team are property managers and solicitors, who can help in the management of the property, from tenancy, repairs and maintenance to legal processes and concerns.
Property managers, in particular, will be helping you with ongoing building reports and inspections, periodical rental increases, sales appraisals, tenant applications and the rent process.
On the other hand, solicitors play a significant role in the conveyancing process, or the legal transfer of the title of a property from the seller to the buyer. They oversee the entire sales process, check the titles, contracts and other paperwork and ensure that the building abides by the requirements of the local council.
According to Mr Moroney, investors may opt to have multiple numbers of these professionals in their team, depending on their goals, strategies, financial capability as well as the regulations governing the professions involved.
He explained: “One accountant will work better in one situation as opposed to another. Same way with solicitors. Laws regulate this as well—a New South Wales solicitor may not be able to operate in Queensland. You've got to do those checks on particular people.”
Meanwhile, buyer’s agents, in the simplest sense, will help you identify a good property by acquainting you with growth drivers, market conditions and investment trends.
“It's really good to get that ground truth. Someone to source out that that property for you is crucial to your success,” the property investor said.
If property managers, solicitors and buyer’s agents take care of the management of the portfolio, mortgage brokers and accountants help investors navigate the financial aspects of property investment.
A lot of experts regard the venture as a ‘game of finance’ because of the influence of banks and lenders not only on investors but on the property market as well. As such, a good financial strategy is critical to success.
Mortgage brokers can help you identify the loan products and features that will suit your needs best, while accountants can help in financial management by consistent and thorough assessment of your taxes and finances. Both of these professionals are well-equipped to assist you in forming an effective strategy that will maximise your investment returns.
Mr Moroney shared: “Three or four years ago, while I was talking to my mortgage broker, I was able to get an assessment on two to three loans at a time. It really boosted up my portfolio, having that expertise around me, because it pushed me from, ‘I really want to get the next property’ to ‘How about we try and get two.’”
Engaging these professionals helped the investor save time on processes and focus instead on developing strategies and buffers that eventually took him from property one to property 30.
According to him: “These are people who have business development managers working with them on a daily basis, with whom I have no access to if I haven’t engaged experts. These experts are really crucial.
“With them, I have a leverage. They can take a giant chunk out of the steps, make it a lot easier for me as they put me in a much better position in terms of knowing where I am, what I can do and what capacity I've got,” Mr Moroney added.
At the end of the day, all of these professionals that he continues to work with gave him the most important commodity for property investors—time.
While there’s the intention of learning from experience when doing things on your own, it can significantly delay your investment journey or, worst-case scenario, even completely derail it. Conversely, engaging professionals can allow you to understand and assess multiple options at a time while improving your knowledge through the expertise brought in by your team.
According to Mr Moroney: “A lot of people don't give an emphasis on their own time. They’d rather try and do something on their own and spend hours and hours and hours, failing to recognise the value of their time.”
“Having a mortgage broker, for instance, lets me evaluate 30 different loans at one time and puts me in a perspective of getting the best deal, all while minimising the amount of time I spend. You can go into four different banks and spend four days doing the same thing by yourself or you can get a broker and probably get an answer in 20 minutes.
“It’s not only about your own personal time but the efficiency of time. If it takes you six months to find that deal for a loan, then it could take you another couple of months to find a property deal. You might have missed out on significant capital growth,” the property investor highlighted.
Making the most out of your investment team lies on building good relationships with each professional you’re engaged with.
After all, as there are no two investment journeys alike, they will need to understand your personal goals, capabilities and limitations in order to help you determine the best steps to take throughout your wealth-creation journey.
“Build that rapport and constantly be in contact. They understand you, you understand them, the working relationship starts to flourish and grow,” Mr Moroney concluded.
Tune in to Luke Moroney’s episode on The Smart Property Investment Show to know more about the lessons he learned from building a 30-property portfolio.