How to Build a Reliable U.S. Property Investment Team
Many Australians have started investing in property overseas.
With how expensive it is to buy into the market here, you’ll save massively if you simply invest elsewhere.
In the US, you can buy a house for the price of a one deposit here in Australia. We’re not joking, that’s how huge the difference is.
But of course, while investing in the US takes a financial burden off your back, doing so comes with its own set of challenges.
One of the factors that people tend to overlook is the value of a team. If you’re investing here in Australia or New Zealand, especially if it’s somewhere close to where you work or live, then sure, you can handle walk-throughs and inspections by yourself. It’s just a drive away; no hassle.
Investing in the US is a different story. You can’t fly there as often as it’s necessary. And even if you can afford it, it’s simply impractical to do so.
Remember, you’re in the business of property investing, not just a property investor. Growing your investments in itself is a business, and all successful businesses require having a team in place.
But this isn’t as simple as it sounds. You don’t go out choosing random people just because they claim they can help you. You’re investing in a place that you’re not entirely familiar with – it’s important to choose people that you can trust to handle your big investment.
To build a team that can run your business smoothly, you’ll need realtors, property managers, and maintenance managers.
What happens if you get the wrong team?
A lot of investors spend so much time picking the right locations and properties to invest in, but don’t really put any effort in building the team who manages their investments for them.
The very first mistake that they make is failing to choose the right team.
Building your on-ground team is no different from choosing the right employee for any business: they have to be qualified for the role, and they need to be the best out of all the options.
Yes, that means that you don’t have to hire the first person who shows interest in the role. Don’t be in a hurry to build your team; this is crucial to your investment’s success.
Think of the successful sporting teams: every player has a specific role and they all work together to form a team that works effectively and efficiently, towards the win.
This is what you want for your on-ground US team – a team where every member pulls their own weight in their respective roles, with the same goal in mind.
Here’s how getting the wrong team will cost you and result in a bad investment:
Property managers literally have the keys to your front door. They’ll be on the frontline when dealing with tenants and potential tenants.
Imagine if they find the wrong tenant on your behalf – they didn’t conduct a thorough background screening on the tenant, or they picked one who just won’t pay their rent on time or do nothing but complain. What’s worse, bad tenants could damage your property too.
If you get a bad tenant, it’s not that easy to evict them. Evictions can be expensive and cost a landlord time and resources too.
Now imagine if it’s the other way around. You have your ideal tenant who passed the screening process, pays on time, doesn’t disrupt the neighbours, and handles your property with care. But then, your property manager treats your tenant poorly and offers bad service.
It would be a waste to watch your ideal tenant leave, but you can’t blame them for it.
If your maintenance contractors don’t do their job right, the effort you put into security and renovations will all be futile. Your property can end up with unresolved problems with leaks, wear, and tear.
Over time, these ignored problems will lead to your property becoming more damaged. This will not only result in your tenant leaving, but it will also cost you a lot of money to fix issues that have been permitted to worsen due to your manager’s negligence.
Consistent mistakes by these managers will cost you thousands of dollars. These unnecessary financial burdens can be remedied by picking the right maintenance and property managers.
Where to identify your talent pool
So you want to form the most efficient on-ground team for your US investment, and you understand the value of having one, but then, you have no idea where to find the right team. You’re in Australia, they’re in the US… so where do you even start?
Here’s what you can do:
Finding the right realtors
Your realtors (or real estate agents) are basically your salespersons. They’re the people who try to convince prospects to buy or rent your property. So you want someone who really knows the real estate business and is excellent in sales talk.
To find one, use websites like zillow.com (similar to our realestate.com.au ). Find multiple options and select a few you think will do the job well.
Finding the right property managers
Your property managers are the ones in charge of setting competitive rent prices, collecting rent, screening tenants, keeping your property in good condition, and managing your budget.
Given their wide range of crucial tasks, it’s important that you find a property manager who works hard, is efficient, and is honest.
There is no formal process in finding one, but if you choose the right realtor, they will know good property managers for you to choose from.
Finding the right maintenance managers
While property maintenance is also a task accomplished by your property manager, maintenance managers monitor the condition of your property more religiously and are in charge of handling all repairs and refurbishments.
Use a website like Angieslist.com and screen your maintenance managers from there.
Generally, you can find people for all these roles in real estate property investment groups online (e.g. on Facebook). Start to engage with others in these groups to build your connections and learn from others.
How to build a reliable ‘on-ground’ US property investment team
As we said earlier, choosing your team members is like hiring a new employee in a company – you need to apply the process a business would when advertising for a role and choosing who gets it.
For every role required, you need to have at least five options to choose from. That way, you know that you’re picking the best fit for the role.
Here’s what you can do to ensure that you’re screening your prospective realtors and managers properly:
Ask for how many properties they have sold/leased/advertised in the same area as your investment.
Look for quality reviews from people/investors who have used their services before.
Ask for references and do a thorough background check through these references.
Look for testimonials from other realtors and investors who can prove the value of the property manager’s work.
Check for online reviews and make sure that the reviews sound authentic.
Ask for documentation of their renovation work (e.g. before and after photos and videos)
Note the extent of their capabilities in repairs and refurbishments.
How to identify the right person to join your team
Now that you’ve identified your talent pool, you need to conduct interviews with them to get a sense of their personality and how they operate.
Apart from confirming that they’re qualified skill-wise, it’s important that whoever you choose is someone you can easily get along with, is genuine, and likeable. Remember, you will be talking to these people a lot. You don’t want someone who’s grumpy or negative, even if they are good at what they do.
Given the physical distance, video calls are the best you can do to build a workable and ongoing relationship with them.
During the interviews, make sure you ask what they would do in hypothetical scenarios like difficult tenants or serious repairs. Ask them about their worst problems and how they managed to pull through. It’s important that those you choose have good problem-solving skills and don’t need to depend on you for every small decision that needs to be made.
Ask them too if they have any questions for you. Those who are confident and truly interested will have several questions for you in return.
After the interview, ask to check the references they sent you, and actually do it.
The person that presents themselves the most professionally, answers your questions with the most detail (or accurately), and isn’t hesitant about you speaking with their references is your best option.
Doing your due diligence early is better than making costly mistakes later
Your investment won’t succeed even if you pick the perfect location and property to invest in if you get the wrong team to manage your property. This will only pose unnecessary problems and will cost you a lot of money you could have otherwise saved for more investments.
With the right ‘on-ground’ US team, you will have an efficient support network that you can rely on time and time again, especially if you’re looking to grow your portfolio.
This is why we included ‘Team’ in our proven property investment strategy called STARR.