The benefits of buyers' agents for property investors

The property investor was thrilled – he’d found the perfect house to buy in Sydney’s inner west that promised a great rental return and handsome capital appreciation. 

But buyers’ agent Nick Viner ordered him to cool his heels. He wanted to commission a building report from an independent inspector he knew and trusted, even though the seller’s agent had already provided one. 

Two days later, the new report came back to say that cracks in a wall found inside an internal cupboard had led to the discovery of major structural problems that would cost at least $250,000 to fix.

“You know, there’s even more value in hiring a buyers’ agent when you’re looking for investment property because we can help people avoid expensive mistakes,” says Viner, principal of Buyers Domain. “We know how to research and inspect, we know the market, and we understand value, rental returns and likely capital growth. 

“We can assess your financial goals, and we’re buying property day in, day out as against someone who has limited time to work out what to buy and will only go through the process a few times in their life. If you’re sick, you go to a doctor. If your car breaks down, you visit a mechanic. Why would you not use a buyers’ agent when buying investment property?”

A major challenge in securing a good investment property for a client is keeping them “agnostic and pragmatic”, believes Melbourne buyers’ agent Cate Bakos of Cate Bakos Property. 

“They don’t need to love the property, but they need to be proud of it and know how to manage it without over-capitalising,” she says. “They need an agent experienced in buying investments who can advise on tax deductions and against paying a deposit out of non-tax-deductable savings.

“Also, there’s immense value in having a buyers’ agent who’s intimate with their targeted locality, who knows the streets that are good, bad, dodgy and up-and-coming, and who understands the rezoning legislation and what it will mean for the future, including overshadowing. You don’t know what you don’t know.”

In today’s wildly variegated markets, buyers’ agents can also be invaluable in advising clients from different states where to put their money. Reece Coleman, for instance, of The Buyers Agent Network, has been busy investing in homes in Adelaide and Brisbane for Sydney and Melbourne clients.

“They’re markets that are performing so well at the moment, and I’m watching trends, hotspots and infrastructure development constantly,” he says. “I saw what happened to Sydney after the Olympic Games, and I’m now closely watching Brisbane in the run-up to its Games and its infrastructure spend. I bought an apartment there in 2020 for $741,000 and the one next door with much less of a view just sold for $1.3 million.”

Coleman agrees that investors often have more of a need for help than those buying a home for themselves. “Most people start off trying to buy in areas they know and like, and get emotional about that,” he says. “That can really get in the way of making a good decision.”