How do you become aware of changes in the circumstances of your clients? When an investment property is purchased, clients should be asked to let you know of any significant changes in their circumstances. This is important because a client may take actions that are not in their best interest. For example, they may simply sell a property if a problem arises, whereas you may be able to think of other ways to solve the problem and retain the client’s long-term strategy.
Many aspects of a client’s circumstances may alter their view of property investment or their capacity to continue with the investment. These include loss of employment or reduced hours leading to reduced income, divorce or separation resulting in a property settlement, illness or disability resulting in different long-term plans, a move interstate or retirement.
You need to think laterally about the possibilities offered by a change in circumstances of your clients. It may be that in the short term, mortgage payments can be temporarily reduced or the mortgage renegotiated until the investor obtains new employment. Or it may be that a client who has managed their own rental properties becomes ill or retires and no longer wants that responsibility. The solution may be to employ a property manager rather than sell the properties.
A client who wins a lottery or inherits a large amount of money may also change their long-term strategy. If they no longer need to increase their wealth, they may be content to put their funds into a couple of low-risk managed investments with a proportion in fixed interest.
In some circumstances, the client may want or need the capital funds generated by the sale of the property. While it may be appropriate for some clients to borrow against the property to generate capital, other clients will want to sell. In this case, you should do everything possible to facilitate the sale and obtain appropriate returns for your client.