Expat Property Investing 101: Assemble Your Team

“Teamwork is so important that it is virtually impossible for you to reach the heights of your capabilities or make the money that you want without becoming very good at it.”   Brian Tracy

Expat Property Investing 101: Assemble Your Team

Build the right team and you will achieve your property investing goals.

Once you have determined the purpose of your property investment and thoroughly surveyed the possible risks to your investment in your target market, it’s time to assemble your real estate investing team.

Like most things in life, the probability of achieving a successful outcome is much higher when you have the knowledge and skills of many people contributing to the cause.

And, quite frankly, it is nearly impossible to engage in a real estate transaction without the professional aid of most of the people discussed below.

Real Estate Agent

A good real estate agent is like gold. A good agent will have insights into the local market that only an insider with years of experience on the ground can have. They will be able to give you information on the current state of the market, the best neighbourhoods, and even the best buildings.

Furthermore, a good real estate agent will have the expertise to help guide you through the purchase process and negotiate the best price for your investment. The great news is that in many countries the services of the buying agent are free, as the seller pays the commissions.

Finding a good agent, however, takes some work. If you are buying your property as an investment, you should find an agent with expertise in investment properties. As stated in an earlier post, buying a home for yourself to live in is a much different decision-making process than buying one as an investment. If you are buying for an investment, your agent should have good knowledge of rents in the area, the value of renovations, and the preferences of the renters you are trying to attract.

Mortgage Broker

If you are paying cash for your investment, then congratulations! If not, then you will need a mortgage. Your mortgage decision can have a HUGE impact on the amount you pay for your investment over time, so it should not be taken lightly. The difference of even ½ of a percentage point in interest can mean thousands of dollars, and other clauses in your mortgage contract such as the early repayment clause can vary greatly. Thus, you want to make sure that you are getting the best mortgage for your specific situation.

While your personal bank may be able to give you a very good offer, my advice is to consult a mortgage broker. A good mortgage broker can survey all of the products on the market and find you the best rate and terms for your unique situation. In contrast, you banker will be constrained to only the products that your bank offers.

As with real estate agents, mortgage brokers in many countries do not charge you a fee – they get paid by the financial institution offering the mortgage.

Lawyer

In most countries, you will need a local lawyer to complete the legal paperwork for your property purchase. In some countries, like France, a notary usually does this, and often it is the same notary acting for both buyer and seller. However, it is strongly advisable that you get your own independent legal advice on any purchase. A good lawyer will not only be able to complete the proper paperwork,but can also give you advice on the wording of the contract and point out details that you should be aware of and may want to change. A legal expert who is working for both sides may not always act in your best interests.

If you are buying in a country where the language of business is not one you are fluent in, you should also make sure that your lawyer has the language ability to both read the purchase contract and explain it in simple terms to you. This will avoid any shocking surprises down the road, such as the realization that your neighbor has exclusive right to graze his animal on your land for the next 10 years or something like that!

Property Inspector

A property inspector is an essential expert to have on your team. Again, you don’t want any surprises when you or your new tenants move in.

If you are buying a new build, which I don’t usually recommend for various reasons which I will outline in a future post, then your due diligence on the builder, the seller, and the new construction warranty is of utmost importance.

Property Manager

If you are going to be renting your property, then finding a good property manager BEFORE you buy your property is crucial. In my experience the management of tenants is where the highest risk lies for the expat property investor. Being thousands of kilometres away from your precious investment can be a very stressful situation if your property is not in good hands.

Finding a good property manager is almost as difficult as finding a good contractor, so it will take some footwork. However, this is time well spent, as the difference between a good and bad property manager could be the difference between an investment that thrives and one that sucks your bank account and personal energy dry.

Contractor

If your property is going to need some renovations before you take possession, then you are going to need a local contractor that you can trust to do the job right. It is often not the easiest of tasks to find a good, honest contractor, so it would be a good idea to do this research BEFORE you buy your property, especially if timely completion of the renovations will have an impact on your rental income.

If you are a handyman/woman and plan on doing some of the renovations yourself, you need to be very careful to find out what the local laws are on this. For example, many foreigners have gotten in trouble in the U.S. for doing work on their own property without a Green Card! Apparently, it is illegal to even do work on your own property if you don’t have the proper residency papers.

Mentor or Support Network

Of course, before you start investing in property, you should read some books on the topic, take a course, do some online research, and talk to others who have tread the path before you.

In addition, the best thing you can do is to find a mentor with experience doing what you want to do to guide you along the way. This could be a friend or someone who you connect with through a real estate investing group or network. It should be someone who is personally accessible who has done what you want to do already. You are going to have a lot of questions about the process, and you need someone you can trust to answer them for you.

When we were thinking about buying a property in France, I read two books on the subject, did hours of online research, and subscribed to a couple of monthly email newsletters from reputable property investing websites. We also have friends who own a number of properties in France, and their insights on the subject proved extremely valuable. In the end we did not buy in France, but if we had gone ahead, I felt comfortable knowing that I was well-prepared and had someone I could trust for guidance and an unbiased opinion.

How do I find all these experts?

This is where the support network mentioned above becomes invaluable. There is nothing better than a recommendation from someone who has successfully worked with the expert already. Even better is a recommendation from a number of people, and this is where becoming a member of a property investment network or engaging with an online community through discussion boards will help you.

However, don’t just take the recommendations at face value. You should personally meet the professional in question, discuss your long-term goals, and interview them about what they feel they can offer you. You want to make sure that you are entering a win-win relationship, where they help you develop your investing business or buy the right property for personal use, and you help them develop their business by becoming a loyal client. Finally, don’t be afraid to ask them for a few references from some of their current clients.

Sound Too Hard?

If finding all the above people sounds like a lot of work, well, it is! Remember that this is a huge purchase that you are about to make, so it is going to take a bit more time that going down to the shop for a jug of milk.

Some people will enjoy the challenge of learning something new and going out and creating their team, researching the market, successfully making a purchase, and learning the ins and outs of managing the property.

However, some of you may be exhausted after reading this and the two previous posts and are ready to give up the idea of ever owning property! You may not have the time to properly prepare yourself for property ownership, or would prefer not to deal with the stress of managing your investment.

I don’t blame you. The good news is that if you are making your property purchase for purely investment purposes and not for personal use, there is an easy way to invest in the property market, and that is by investing in REITs (Real Estate Investment Trusts).

How about you? Do you have any suggestions for finding and working with property professionals? Share your wisdom with our community by posting in the comment box below.

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