In order to enable a discussion between you and your client to establish how appropriate property investment is as an option, a number of consultations must take place. These consultations are also an opportunity to provide an overview of the property investment process.
Potential property investors may understand little of the overall process and it falls to the property investment advisor to be sure that their clients have the opportunity to understand what is involved should they choose property as an investment.
We will examine this process in more detail later in this topic. To summarise, the property advising process will progress as follows:
Consultation 1: Needs Analysis
You meet with the client and collect the information required to assess the suitability of property as an investment via the ‘Fact Finder’, the risk profile of the client and the financial capacity to invest.
Consultation 2: Property education
Clients should be invited to a second meeting to to be given an outline as to how the property investment process is implemented and hear your initial strategy. At this stage, you may not have specific recommendations. and.
Consultation 3: Finance options
The client will meet with an accredited finance professional to explore the options available to assist future property purchases.
Consultation 4: (Property Investment Report)
A document will be presented to the client outlining their current situation, how the property investment recommended will assist in meeting their goals, further details of the investment such as possible tax benefits, depreciation schedules, projections of income, cash flow and value growth returns, as well as any ongoing recommendations for property management and investment strategy reviews.
Consultation 5: Property tour
If appropriate, the clients will be introduced to the physical building recommended as an investment and may be introduced to key people such as developers and property managers. Note that this step does not specifically require a physical inspection of the property but requires the client to become physically familiar with what they are buying and who is involved in the process.
Consultation 6: Formalisation of arrangements
Where contracts will be signed, management agreements entered into and a review service agreement is commenced. The explanation helps clients understand that they are engaged in a deliberate, measured process to find the best property option for them.