Why Use A Property Finder?
Debbie Van Den Broek explains the role of a property finder and how the contract between investor and agent works.
31 December 2017
Why use a Property Finder? It’s a question that many people ask. Why spend money to have someone source an investment property for you when you could just do it all by yourself?
A Property Finder is also known in other countries as a “buyer’s agent”.
After all any person can buy a house as long as they have a bit of a deposit. There are always thousands of houses for sale and the agent selling it will look you in the eye and say it is a good deal. Time heals all so if you buy and hold for long enough you will increase your initial cash deposit and it will be a perfect 25-year savings plan.
For the majority of investors this is the outcome. They have one rental, usually somewhere near where they live and are negatively geared for a long period (quite often because they self-manage and set their rent too low but that’s another story). They get there in the end but have worked 8am to 5pm for their whole life to pay for TWO houses, their own home and their rental property. The golden nest egg becomes a golden noose.
The real estate industry in New Zealand works like this; each agency has numerous sellers agents out hunting for listings. There are several agencies in each town. So for every vendor there are a large number of sellers agents vying for a listing. To secure the listing, they promise a fabulous price and a big marketing campaign. Then for (usually) 90 days these agents work for the vendor to sell the property to the highest bidder; their job is to create competition. They only get paid if the property sells and they do not care if you’re a home owner or an investor.
‘A property finder works for the buyer and is only paid by you once you have purchased an investment property’
How Does It Work?
A property finder works for the buyer and is only paid by you once you have purchased an investment property. Not just any property - an investment property, one that makes you money and isn’t a drag on your life, sitting around waiting for you to pay for it. For people that are inexperienced, time poor or wanting to buy outside the area they live in, we are invaluable because we speed up your wealth creation.
We point out the downsides, we know the market, and we can also see a bargain and be all over it. In my case it’s often before you’ve woken up or had a morning coffee. That good looking deal on Trade Me? I saw it before it was listed and know about the gang house two doors down and the hidden extra $50,000 in deferred maintenance not mentioned in the ad. Someone out of town will probably buy it.
A good Property Finder will already be a successful investor and you are buying through their eyes and using their experience to avoid beginner mistakes.
When choosing who you work with, feel free to ask what they own, what they’ve done, what’s their passive income and make sure you choose a successful investor with a current network in the town where you are investing. In any market there are conmen and with real estate a common trick is people selling properties that they haven’t visited in towns they don’t know. Make sure the person that works for you knows the common mistakes (maybe they made them once upon a time) and is there to help you avoid them. This way you can accelerate your journey to financial freedom and out of the rat race.
Cup Half Full
Finally I just want to talk about all the “negative” changes from our current government. With the proposed legislation changes some landlords are getting nervous and selling up. This is an opportunity. Less rental homes plus more tenants equals higher rents.
Remember to be contrarian and look to buy when others are scared. If you have a negatively geared portfolio the opportunity is to start to invest in cashflow positive real estate, balance your portfolio and keep going. People are still going to need a roof over their head tomorrow and those who can be strategic and continue to grow will reap the benefits in years to come.
iFindProperty is a licensed Investment Property Agency and our clients tell us we are great at helping investors find, analyze and buy great properties to build an awesome portfolio. Our team of Property Finders operate all over New Zealand and each are successful investors in their own markets. Successful investing starts with you and your property goals, so contact us today to talk about what you want to achieve and we will put a team in place to make it happen. Contact:[email protected] or 0274 866 146.