Free advice: Five experts you can go to for information

As the old adage goes “you get what you pay for”.

Novice buyers looking for good advice should be willing to pay for the latest data and for access to the experts.

In saying that, there’s plenty of currently available information available for free – and quite a few experts who are regularly available for a chat.

Real estate agents

The best real estate agents are local market experts that can let you know what the buyer sentiment is, how long properties are taking to sell and potentially let you know about properties coming onto the market soon. They work regularly in smaller defined areas – often a collection of suburbs – and know then very well.

Here’s a sample of what you can gain from chatting with an agent:

• Knowledge of the type of properties available for purchase and the price ranges for each.
  
  
• An understanding of the length of time a property takes to sell and which are in higher demand.
  
  
• Knowledge of the type of buyer currently looking in the area.
  
  
• An historical perspective (look to well-regarded agents who have worked in the area for a while) of growth and changes.
  
  
• Potential referrals to building and pest inspectors, property managers and other experts.
  
  
• An idea of the prestigious areas and the not so desirable streets.

Speaking to them as a buyer, you must be aware that they are working for the vendor. They will most likely tell you things in the seller’s best interest, not in yours. One way to get around this is to speak to a real estate agent in the area who isn’t selling the property you’re considering. Alternatively, you can speak to a property manager.

Property managers

A boutique property management agency can help fill in the blanks for you around tenancies and the likelihood of your property being given a good run on the rental market.

Here’s a sample of what you can gain from chatting with a property manager:

• An understanding of the types of properties that are rented first.
  
  
• Clearer knowledge of how much weekly rent can be charged for different properties in different conditions.
  
  
• Explanation of who the tenants are likely to be.
  
  
• Knowledge of the most desired rental property qualities in the area.
  
  
• An up to the minute explanation of vacancy rates and any difficulties they have in renting out certain properties.

Many property managers have very good ground-level knowledge and know exactly what their tenants do and do not like. However, in terms of forecasting and predicting how the market might shift, you may prefer to speak to a property mentor.

Property mentors and advisers

Property mentors, many of whom are buyer’s agents of some form, have a wealth of knowledge, usually from researching markets and dealing with other investors previously. However, you need to know where their skillset lies. Some are going to be able to thoroughly explain their ideas on where markets are heading, while others will help you come up with goals and strategies to get you on track with your property investing.

Some of these experts allow free access to a point, for instance a limited number of seminars and lengthy workshops – often for whole weekends. However, they often have hefty fees after this point. If you’re not paying, then you also need to wonder where they’re getting their income from – is it through commissions?

Remember our tip: follow the money. Here are 10 questions to ask an adviser before taking any advice on board.

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Mortgage broker or lender

For information about loans, your borrowing capacity and whether or not you can get a mortgage for the property you’ve got your eye on, there are calculators available online. However, the majority of brokers’ services are at no cost to you (they usually get a commission from the lender).

You should choose the broker wisely, ensuring that their panel of lenders is as extensive as you’d like it to be and that their understanding of your category of buyer (first home buyer or investor, for instance) is sound. You can read some information here on how to pick a mortgage broker.

Here’s a sample of what you can gain from chatting with a broker:

• Knowledge of who will lend to you.
  
  
• An understanding of how big your deposit needs to be and whether or not you’ll be paying LMI.
  
  
• Information around types of loans available and the different features of each.
  
  
• Explanations of break costs and technical jargon you might not understand.
  
  
• Assistance with unusual loans, e.g. if you are going for a joint venture arrangement or having a guarantor
  
  
• Assistance with pre-approval.

Local council members

Investors will have varying degrees of success in touching base with the local council, especially as some are more open to property investors than others. However, it’s always worth a call to ask some pointed questions about what is occurring in the area.

Here’s a sample of what you can gain from chatting with your local council:

• Knowledge of recent or approved development applications, including specific details about them.
  
  
• An understanding of the council’s growth plans for the area.
  
  
• Any recent examples of significant local government spending in or around the suburb.
  
  
• A point in the direction of any useful reports that they have.
  
  
• Explanation of their policies around subdividing, knock down rebuilds and similar.

Here is observer Mark Armstrong's account of how he used local council information to avoid a major property disaster.

Lastly, you can always try chatting to other property investors.  They’re often in the same boat as you, are great to discuss trial and error with, and often will have stories to share you can learn from.

You can share referrals, tax tips you’ve heard and important location-based news.

Remember to be wary – investing is not one size fits all, and just because “everyone else is doing it” doesn’t mean that it’s necessarily the thing for you to do. Any novice advice, or even experienced investor advice without the necessary qualifications to back it, should be taken with the full understanding of where it is coming from.