I believe that the ultimate goal of every Mortgage Broker is to help clients who want to, to build an investment property portfolio. I’m not saying we can or should be their financial planner or accountant, but we should at the very least educate ourselves about property investment so we can discuss it in a meaningful way with our clients and have cross-referral relationships in place with these other professions.
As Brokers, it is very much in our interests that if our clients do become property investors that they do so successfully.
Only about 8% of all Australians are property investors, and of them, roughly 73% only own one. 18% of investors own two investment properties and only about 9% of investors own more than two investment properties. So about three quarters of people who buy an investment property don’t buy a second one, and 91% of investors own two investment properties or less. What this tells me is that they are having a poor result the first time around — which is a loss for them and also for us as their Brokers.
As their Brokers we are, I believe, the group that is most invested in their long-term success as investors. Real Estate Agents and Investment Property firms have the financial incentive of selling the investor as many properties as they can afford at a high price, but our trail commissions and clawbacks clearly align us with ensuring their wealth building is sustainable and that properties are bought at the right price. Our interests are aligned with the client’s goal of keeping their borrowing and purchase costs as low as possible and cash flow as high as possible to make them long-term, multiple property owners that have the time to achieve capital growth.
So to further increase the Lifetime Value of your clients, I strongly recommend educating yourself around safe and sustainable property investment and the right borrowing strategies to go along with that.
The final chapters of my first book, The 7 Easy Steps to Mortgage Freedom, detail my own views on what I believe is the safest, most sustainable method of property investment. I intend it purely as a starting point for budding investors to start educating themselves, but the purpose once again is to demonstrate to consumers that our role extends beyond just getting them a cheap loan today, but rather working with them as their lender for life.