7 expert tips for property investment success

Get insights from a property expert on how to manage different aspects of property investment to boost your chances of success.

Negotiation is an invaluable life skill that isn’t taught in schools, but when it comes to property, learning how to deal with a wide range of industry specialists can be crucial.

As an individual investor, you’re limited by your personal levels of skill and experience, making dealing with professionals who deal exclusively with property all day every day a challenge. But by doing your research, being comfortable with some degree of uncertainty and negotiating confidently you can stack the odds in your favour.

Here are my tips for investment property success.

1. Finding the right mortgage broker

The first step is ensuring that you have appropriate finance. This means you’ll be armed with the right information about your lending options and you’ll be in a stronger position to negotiate. Plus, with the help of a mortgage broker, you might be able to secure more funding than you thought, allowing you to consider better properties or more flexible offers.

However, it’s crucial to find the right mortgage broker. They should be on your side – there to help you succeed and build long-term wealth; so you need to think smart and futureproof that relationship – it works both ways.

2. Buying off the plan

When purchasing off the plan for investment purposes, it’s important to focus on the numbers and not become emotionally attached to an individual property, so you can be open to opportunity.

For example, during the COVID-19 crisis, many buyers who bought off the plan walked away from their contractual obligations and didn’t settle, meaning developers were unexpectedly left with completed properties to sell. Savvy investors who knew where to look and how to negotiate found themselves able to access some (or even all) of the previous purchaser’s deposit. Not all developers are receptive to this, but at the end of the day they’re looking to sell their projects off the plan or on completion, so there were opportunities to secure some great assets.

3. Finding a builder

If there’s one industry where everyone has an opinion, it’s the building industry. It’s important to do your due diligence, and one of the best things you can do is inspect their previous work. Ask to see a project they built five or 10 years ago. See how it’s standing the test of time, and if it’s structurally and cosmetically sound. Don’t be afraid to knock on the door and speak to whoever is living there. Ask if there are any problems – most people will be happy to tell you if there are. If yes, go back to the builder and see how they respond – their answer can help guide your decision.

4. Become a developer

Property developments sit at the complex end of the negotiation scale. Regardless of the size of the development, success depends on having the skill, knowledge and experience to identify, negotiate and secure a suitable site. You also need the time and patience to liaise with a range of trades, government departments and professional services, constantly dealing with people who don’t have the vested interest that you do, and with the potential to drag out the process in terms of time and money.

5. Commercial property

A key difference with commercial property (as opposed to residential) is that you can lock in automatic rent increases year on year. But it comes down to market conditions at the time as to who has the upper hand in negotiations – you may find yourself choosing between leasing the property on terms that favour the tenant, or leaving it on the market to achieve your asking price. You may be better off seeking premises tenanted by small and medium-sized enterprises, as tier-one tenants come armed with agents, staff and consultants who have the resources to negotiate hard for a good deal.

6. Property management

It’s worth investing time to find the right property manager, but keep in mind that while you may find some cheap rates, you also get what you pay for. And if you have a half-million dollar asset, why would you shop around based on fees alone? Finding a good team with an experienced property manager is worth sourcing and keeping for the long term.

7. Off-market opportunities

Like it or not, many of the best deals in property are off-market, meaning they never make it to real estate websites. Developers sell to other developers and agents sell straight to buyers already known to them. It saves the vendor time and the cost of expensive marketing campaigns.

So no matter how skilled you are at negotiating, you will never gain access to these opportunities. This is where you need a trusted advocate or professional mentor in your network. They should have the contacts, networks and bargaining power to negotiate deals you can’t access on your own.

It’s also nice not to have to go it alone! Imagine how much more successful you would be if you took the time to assemble a team of seasoned property professionals, all working to help you optimise your results. You’ll have your financial resources in place, you’ll be able to quickly find properties that suit your strategy and you’ll be able to efficiently negotiate with vendors to get the best terms and inclusions.

You and your network will be able to achieve things that are almost impossible to achieve working in isolation.

Cover image source: Oleksii Synelnykov/Shutterstock.com

About Luke Harris

Luke Harris is the CEO of The Property Mentors. He has more than two decades of personal experience across business, property and investing. He is the co-author of Let’s Get Real and the author of Property Fit.