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Mistakes I’ve Made Building My Property Team That You Can Learn From
“Hello Dr Ro, l’d I like to ask you a question relating to the mistakes that you made as a property investor. I guess what would be really helpful if you could give me three tips for building a property business, specifically building the team. What mistakes have you made when you started building your power team that you talk about?”
This question I’ve received frequently is such a great one. I have to say that I made a lot of mistakes in this particular area at the beginning. In fact, the very first property that I bought, I bought with a business partner and we didn’t have a power team. We tried to do everything ourselves. During that journey, a lot of small mistakes added up quickly.
Hiring an Accountant for Your Property Business
One of the first mistakes that we made was hiring the wrong accountant. We made the classic mistake of finding an accountant that was very local to us, who my business partner knew very well. I didn’t know this guy at all. He knew nothing about property investing. In fact, when we started to build our portfolio and we had bought the first 10 to 20 properties, he seemed almost scared by the fact that we were buying so many. This should have been an alarm bell for me immediately.
One of the first things I highly recommend that you do, especially if you’re looking to build a large portfolio, is find an accountant who is ideally referred to you by another investor. Someone that has used this accountant before, that’s comfortable with them, and ideally the accountant themselves should be a property investor.
That’s an important question to ask them when you first sit down and decide to engage them. In fact, if they’re not an investor themselves, they should at least have clients who are property investors and ideally have covered the areas and the strategies that you’re going to develop in your portfolio. Whether its basic Buy-to-Lets, HMOs, development etc. So, make sure that when you talk to the accountant you find out their history and background, and their experience with investors.
Working with the Right Letting Agent
“Wow, that’s shocking. So get a great accountant, that’s definitely worth me looking into. So, what would be your second tip related to the power team?”
The second area, in terms of your power team, where I would say people make mistakes and I certainly made mistakes in the beginning, was finding the right letting agent.
Letting agents are like the lower to middle management in your company. They are the people that deal frontline with your properties, and with your tenants. A bad letting agent equals a badly run business and thus, problems for you.
Drawing from my own personal experience, I had a lot of properties in South Wales, I think between myself and my business partner, we had maybe 20 to 25+ properties in the South Wales area. Unfortunately, we took all of our properties to a letting agent there who it turned out wasn’t the best letting agent.
They didn’t reveal to us a lot of information about what condition the properties were in. Consequently, that cost us a lot of money in the early days. And the reason it cost us money is because they weren’t relying accurate information to us about how the properties were operating, or the type of tenants they were putting in. These were properties that were three or four hours away from us, so we needed a local letting agent we could trust. To be fair, I didn’t have access to the network I have today. Now we use a letting agent that is also run by a property investor.
I would certainly take the time to find investors that you know, and that you trust within your network, who have properties in a specific area and go to them and ask them if they can refer you to a good letting agent.
You need to know how to interview the letting agent. You need to know the right questions to ask them. You’re going to pay them to look after your properties, your portfolio, and you want the right team on your side.
Finding the Right Property Investing Mentor
“I’ve heard so many people say just get yourself a letting agent, it will be no problem. But actually what I’m realising is, it’s really important to get my strategy right first. I don’t have my first property you see, so what I’m going to do is I’m going to take your advice. I’m going to go away, work out what strategy I want to do first, and then choose the letting agent. According to that strategy. Thank you so much.”
It’s great to hear you using the term strategy there. And that leads me to the last person that you’re going to need to get early into your power team. Most people wait too long for this, and that is finding the right mentor. Finding someone that can guide you at an early stage to avoid you falling into the pitfalls that early investors make.
A mentor should be used all along your path, but especially as you get your start. And when I refer to guiding, literally it comes down to what you’re looking to achieve and matching yourself with the right mentor.
Choose someone that has been on the same path, that has done the same strategies that you want to do, and also someone that is actually in a position to guide you and teach you.
I would caution you not to choose a mentor that doesn’t have a lot of experience. Sometimes people choose a friend or a mate, or possibly someone that’s out there advertising themselves in social media a lot and they’re only been around for a year or two. And the problem with that is they haven’t ridden out through different market conditions; they haven’t had the breadth and depth of experience. So, in choosing a mentor, choose someone that you can see has been around awhile, had some good experience and knows the market.
“Dr Ro, I can’t tell you how much I appreciate your guidance on this. I do need a mentor; I realise that I’ve tried stuff in the past and it hasn’t worked. So, I’m going to go in establish what my strategy is before I do anything, and then definitely going to learn some more information and get myself a mentor. But thanks so much, thanks for giving me this guidance. I’ll be finding a good letting agent, a good mentor, and a good accountant thank you.”
My pleasure. The most important thing is to get out there, put some action in, and enjoy the journey.
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