My Experience as an Investor Using a Buyer’s Agent
Having been a Property Investor for many years and owning a Mortgage Broking business, I always felt like I knew what I was doing when it came to buying property. I have a diversified portfolio but always seemed to buy newly built property due to the depreciation benefits.
In 2021 the writing was on the wall that investment lending was going to tighten. I felt that I only had enough capacity to carry one more property, using the bank’s assessment rates, so I felt some pressure to ensure that this property would work hard for me over the next few years. I already had a few newly built properties in my portfolio with great depreciation benefits, but I wanted something that would grow in value more than what I had purchased in the past.
For me, being in this industry, and what I would call a “seasoned investor”, it was hard to reach the conclusion that I needed some help in choosing the right property.
I have had so many clients guided poorly by these “Property Investment Gurus” who seem to get their commission paid by the developer and, in my opinion, these properties have dropped in value or not risen at the same level as others. This is not the advice I was after.
We work with several Property Investor/Buyer Agents/Investment Specialists. I chose to use John Pidgeon from Envisage Property. We set up a meeting and discussed my needs. I wanted a property around $1m that I was happy to contribute to each week, as I had depreciation benefits from other properties and was happy to put some of my surplus income in a tax effective environment. I paid a one-off fee for advice when the property settled. I was happy to pay this fee as I knew the only way Envisage Property was getting paid was by me (not from the seller) but I had high expectations that this property would exceed what I would have chosen myself.
With a strategy in place, we chose the area of the Sunshine Coast. In 2021 it had already had significant growth, but with John’s expertise as backing, he believed the next few years would deliver a positive and strong outcome with this property.
I obviously run a business, so I am extremely time poor. As I had Envisage Property and John by my side, I did not need to fly to Queensland, or research or view properties. I did not need to attend the auction. And the icing on the cake? We were successful at auction by securing the property for $100K less than I was prepared to pay. I purchased the home for $1.1m and the rental return was $800pw. This is less of a return than something I may have chosen but I was open to being guided.
My Sunshine Coast property has been held for just under 3 years. I contribute funds to this each month, however at my tax rate this is paid in a tax effective way. We just had a valuation completed and it came in at $1.55m. I wanted to share this with you as this is an incredible capital gain in a short period of time. It is exactly what was in my strategy, and I met this with the guidance of a Buyer’s Agent.
Would I recommend using a Buyer’s Agent? I get asked this a lot. I believe, like a Mortgage Broker, the value of the agent lies in their experience. It is not hard to become a Buyer’s Agent or a Mortgage Broker, but knowing my field I understood that ,I needed someone with vast experience, not just a “Buyers Agent”. I strongly feel that when people come to Sphere Home Loans, they are not just getting a “Mortgage Broker” - they are getting decades of experience looking over the most complex of transactions. They get our knowledge, our entire team’s experience. We may not have a cool TikTok account, but we have the experience to give the advice that we do. So, my answer is yes, I would absolutely use a Buyer’s Agent if it had the potential to add value to my transaction. It certainly did in my case.
Sphere Home Loans Director Rachelle Kroon