Property Investment News and Advice Blog
How to Build Your Property Power Team
Category: News | Published on 19 Jan 2012 | Written by mark
Building a strong Support team is crucial to successful property investment
Whilst, to many people, property investment is seen as an individual pursuit, it is not possible to conduct every aspect of a successful property investment venture alone. You will need to build a team of key suppliers to assist you in various aspects of your investments. At the very least this team is likely to include a solicitor and mortgage broker and, depending on how 'hands on' your approach is going to be, may also include a letting agent, various tradesmen and a wide range of other specialists. As your business grows bigger you will discover the need to add more expertise to your team.
Many amateur landlords will give little though to building a team of professionals around them and will simply grab a copy of the yellow pages and hope for the best each time they need a job doing. This approach tends to result in more problems than solutions. By carefully choosing, building and developing a team of trusted professionals around you, you will enjoy many benefits including being able to maximise your profits and grow your portfolio much faster than if you were working with a variety of different people with whom you have no real relationship.
Here are some tips on how to build a good support team.
The best place to start when looking for a professional to help you with a particular aspect of your property investments is to seek out a personal recommendation. Of course, it is important to choose the right person to ask for a recommendation. You shouldn't ask your friend who has never bought a property to recommend a conveyancing solicitor to you; but it would be wise to get a recommendation from a successful property investor who has purchased several properties and achieved many of the goals you have set for yourself. You will normally find that experienced investors are happy to recommend people to you. This can save you a huge amount of time and money as you don't have to go through the trial and error process of selecting a suitable professional yourself.
If you do not know someone who can give you a personal recommendation, consider using an internet recommendation service such as Rated People which provides a rating service for tradesmen. Alternatively, if your property is in the North of England contact our property maintenance team, to see if we can help you
Use a Specialist rather than a Generalist
Wherever possible, you should always try to use the services of someone who specialises in the area that you need help in. Their expertise will ensure a better, faster and more efficient service. For example, when selecting a mortgage broker you should always use a specialist buy to let mortgage broker rather a broker who also covers the residential market. A specialist buy to let broker will have a much better understanding of the products available and will better understand the issues most relevant to you in selecting a suitable mortgage product. He or she will understand how factors such as a lender's rental coverage calculation will impact the suitability of a mortgage product, much better than someone who is not familiar with the importance of such considerations, due to them not being relevant when arranging a residential mortgage.
Choose Suppliers that you like and trust
It is important to meet with a potential supplier before agreeing to give them your business. This will allow you to get to know them and get a feel for how they do business. If you are going to be doing business with someone on a regular basis it is important to like and trust them. Ask them questions about how they conduct their affairs and be sure that you like their approach before committing to using their services. If you are unsure about their suitability ask for references from other customers and check these out. Alternatively you could give them a trial and allow them to complete one piece of work for you. If you are happy with their first piece of work you can then give them more business.
Beware of always choosing the cheapest option
A competitive price is, quite rightly, a key consideration when selecting a supplier for any service. However, it should not be the only consideration because selecting a supplier on price alone could result in a worse service that actually costs you more in the long run. For example, many investors will select a mortgage broker who does not charge them a fee for their services. This is fine if you can be certain that your broker will always recommend the products that best suit your needs, but you should remember that a mortgage broker needs to earn a living too. His fee will be paid by the lender who you take a mortgage with, and some brokers who do not charge their clients a fee have been guilty of directing their clients towards the products that pay the highest broker commissions rather than the most appropriate product for the client. If you pay a fee to the broker it may be more likely that he recommends the mortgage product that suits your needs best.
Agree Targets that Motivate your Suppliers and Reward Exceptional Performance
Your suppliers need to be motivated to produce the best results possible for you. Agreeing targets at the start of your relationship and rewarding success is a good way to ensure that this happens. For example, when you are employing a contractor to refurbish a property, you will want the job completed to a good standard as quickly as possible, so that you can get the property let and earning you money. If you agree a timescale at the start of the project it gives your contractor a clearly defined goal to work to. You can offer an incentive, such as an extra payment, for a satisfactory completion ahead of schedule.
I find that using this approach is also a good way of quickly identifying unsuitable suppliers. Suppliers who will not agree to firm timescales or who makes promises that they are unable to deliver, are quickly identified using this approach.
Have a back up plan
Unfortunately, from time to time you will loose a trusted supplier. Your handyman may retire or your letting agent might go out of business. You need to be prepared for such eventualities before they happen. Wherever possible try to identify a second supplier for each service that you use. Give them a small proportion of your business to maintain a good relationship with them so that you are in a position to transfer the bulk of your business to them immediately if necessary. Having back up suppliers can also be useful if your main supplier gets particularly busy resulting in a dip in service standards.
It is also inevitable that some previously excellent relationships with suppliers will turn sour. When this happens it is important to move on to a new supplier quickly. Do not let your business suffer whilst hoping that the relationship might get back on track.