Property investor Matthew Preston said that being an efficient investor is all about taking small, manageable steps to meet your goals. He suggests how investors can do this successfully.
Sydney-based mortgage broker Matthew Preston, who recently featured on an episode of the Smart Property Investment show with host Phil Tarrant, had a lot to say about investing efficiently after acquiring his seventh property a few years back.
The broker said that property investors often dawdle for years, contemplating what they want to do without understanding what they can do, or taking enough small steps to actualise their dreams into reality.
“I had a vision board of properties on my bed and I was eating them for breakfast… and was just really aggressive about getting that goal, and so nothing else mattered,” Mr Preston said.
“Even now I have lists and, in fact, I print out photos of dream houses and my wife… photoshops into the view overlooking the water.”
According to Mr Preston, it’s tricky to actualise anything with 500 property tabs open, only to exit out of all of them on a busy work day.
In order to be an effective and efficient property investor, Mr Preston stated: “First work out what your budget is in terms of buying capacity and speak to a broker about what you can do.”
“A lot of people can sit there for 12 months or more stewing over what they want to do, which can be way out of line with what they can do.”
The mortgage broker said that once investors settle on an end figure, or in other words their final purchase price, it’s time to start working backwards from there.
The first question on every investors mind should be whether they are going to buy in the same suburb or city as the one they live in, where they can the see and attend to it, or whether they are game to buy interstate.
If buying interstate, Mr Preston noted, investors need to determine whether they are going to inspect and maintain the property themselves, or through a third party, which can incur significant costs.
It is also important to decipher what kind of property can be afforded within the predetermined budget; a unit, townhouse or house of some description.
“At least try and narrow it down to a pocket or handful of suburbs that fit the budget, will be workable and manageable and, obviously… with some sort of growth potential for whatever reasons,” Mr Preston said.
The mortgage broker advocated for long-term property investment, declaring it’s not necessarily worth getting stuck on growth disparities from suburb to suburb because: “for me, it’s a 20 or 30 year game.”
Once investors narrow down their selection to a pocket of suburbs and stock within their given budget, Mr Preston stated two ways of finding their new property gem.
“I like buyer’s agents because they force you to take action. It’s like an accountability partner, you pay them $10,000 and they put stuff on the table... forcing you to give a yes or a no, and hopefully you’ll give a yes within a month or three.”
Mr Preston stated that buyer’s agents can exaggerate their ability to access properties that are under market value, or are less accessible to the general public.
Alternatively: “You could just be there for a year without having done anything.”
Instead of using a buyer’s agent, investors can search for property gems in the rough themselves, but this process can be complicated and overwhelming.
In order to maximise investment efficiency, Mr Preston also recommended search engines where investors can can enter in their minimum yield and other investment parameters, which normal search engines like Domain are lacking.
Once a property has been purchased, investment efficiency must continue to ensure it is managed and maintained to secure gains and minimise potential losses.
“I get the real estate to do everything and outside of the agreement that I have with them, I send them my own set of rules that I want them to adhere by,” Mr Preston said.
The property investor orders his real estate agents to be proactive, ensuring all his tenants are locked into leases and sets out various rules in an email to be acknowledged.
“Even when they do maintenance for example, get the plumber to take a photo of the before and show me the after, so I don't get ripped… just to keep people accountable,” Mr Preston said.