Why You Should Never See Your Investment Property

Whenever I give this piece of advice, I often get blank stares. It is a very different approach to what most property investors take. But it is actually a smart strategy when you start to understand the reasons why.But so what if you visit your investment properties?Sure, if you’re okay with getting the results most investors get, feel free to ignore my advice and do what most investors do. But if you want to go further than most investors, I strongly recommend you stick to this rule.Never see or inspect your own investment property.A good investor never visits their property, as a general rule. In fact, you don’t even need to live in the same state as your property.** Side note: this is actually very exciting as it means you are FREE to invest anywhere in the country, opening up way more options for awesome locations. But that’s another topic entirely.Why You Should Never Inspect Your Property

Before you finalize your purchase of the property, you’ll get a good building inspector to check it. They’ll do a far better job than you could ever manage, so checking the property yourself is a waste of your precious time.

Once the property is in your hands, you’ll get a good rental manager. It is their job to routinely inspect the property. As a professional, they will do a far better job than you could.

You should have full confidence in the professionals you hire to take care of your property for you. If not, you have the wrong people.

Inspecting the property in person will result in emotional attachment, which is bad for financial-based decision making.

Your time is worth more than that.

The real money is made in capital growth, something which you can’t see at an inspection.

So get the professionals in and get them to do it. It’s their job! Stay emotionally detached from the property and focus on making money – YOUR job as the investor.Just because you shouldn’t visit the property in person, doesn’t mean you should ignore it. You should be looking ahead to see what the market is doing and anticipating what your capital growth is likely to do in the future. This will help you with growing your portfolio, which is how you really make money.The exciting part is that you can do all of this online.How to Inspect for Capital Growth

Check online sources for evidence of infrastructure projects and investment in the area

Is the population growth trending upwards?

Are more jobs being created?

What notable changes are happening in the area that might attract more people?

Inspecting Your Property is a Waste of TimeAnd sure, you could stop by your property and have a look. But what are you going to see? A house? Yep.If you actually happen to notice any problems while you are there, you’re very unlikely to be able to solve them, unless you’re a qualified builder. And because you lack the qualifications and experience of a rental manager, you probably won’t understand the laws that govern how you should deal with your tenants. It’s best to avoid wasting your time and effort and let the professionals handle it.Even though it sounds counterintuitive at first, it makes sense to never inspect your own property.If you feel that you need to inspect your property, something isn’t right.Perhaps you’re in a situation where things aren’t going as smoothly as they should. Or perhaps your team aren’t doing their jobs right.If you’re struggling to find a good building inspector or rental manager, or your properties are causing you problems that you feel need your personal attention, find a good property investment coach to help you solve these problems as soon as possible.

Buying a Property in Murcia, Spain

After carefully researching the region of Murcia, choosing the right location and type of property, and viewing different property for sale in Murcia, after the ideal home has been found, the next step is to actually purchase it.Whilst not an exhaustive or step by step guide to purchasing property in Murcia, this guide provides an overview of the buying process. Whether buying a Costa Calida property by the beach, or a new golf development inland, the process is the same.Finding a good property agent with plenty of experience is essential, and the importance of an agent with local knowledge, and contacts cannot be overestimated. An English-speaking Spanish lawyer should also be employed. Together the agent and the lawyer should be able to provide the necessary advice and assistance, and help avoid common mistakes and problems. It is also worth consulting a financial or tax advisor, especially if the property is to be a permanent residence.The estate agent can help with finding a mortgage, although they may favour a particular mortgage provider. Spanish mortgage interest rates are lower than the rest of Europe, making buying Murcia property even more appealing. A mortgage offered by a developer is often well worth considering, as there are substantial tax savings to be made. The developer is likely to have a mortgage on the property to fund the development. This mortgage can then be transferred (subrogated) to a new buyer. The new buyer in effect “takes over” the mortgage from the developer, rather than taking out a new mortgage. Savings of several thousand euros in tax and administration fees can usually be saved this way. Subrogation may not be the best way to finance your Murcia property, but it should certainly be investigated. It is important to secure a mortgage so that the properties being considered are within budget. Before getting too carried away, be aware that a deposit of at least 40% of the purchase price plus taxes and fees is usually required. A lot of the process for purchasing property in Murcia will involve appearing in person. If this is not possible, a trusted “power of attorney”, such as the Spanish lawyer, can appear instead.The property buyer needs to apply for their NIE (Numero del Indentificacion de Extranjero) or ID number at a police station. This can be done at any time, and once issued, means that a power of attorney is not required. This number is used to track a person’s financial and commercial activities in Spain. The NIE is used for many things, such as for employment, buying a vehicle and insurance, as well as for applying for a mortgage or other type of loan, and buying or selling a property.Once in possession of the NIE, the next step is to open a Spanish bank account, so that payments can be made. Official documentation such as a passport will be required. There are different accounts available for residents and non residents. Applying for a non residential account requires a Certificao de no Resdiencia) to prove residential status. This can be obtained on application from a police station.The lawyer will help get the necessary background checks done on the property. Purchasing off plan will require all licenses and certificates to be issued, and that the property is debt free and bank guarantees are in place to protect the deposit in case the development is not completed. Purchasing an existing property requires background and history checks into the ownership and debt status. The Lawyer will help to set up an escrow account so that the deposit is protected. It is important to consider making a will; under Spanish law, without a will, the property may not be inherited as expected.Once the ideal property has been found, and the legal and official processes are underway, the next step is to reserve the property. Each developer will have their own procedures, and there may be some room for negotiation. Purchasing an off plan property requires the reservation contract to be signed, and the payment of a small deposit. This will reserve the property for a month to enable the rest of the deposit to be paid. When the deposit has been paid, the purchase contract can be signed. While the paperwork will be in Spanish, translations will be available.Once the property is ready to be handed over, the purchase can be completed. The balance of the purchase price and taxes is paid, and the Escrita Publica de Compraventa (Public Deed of Sale) is signed. This document must be authorised by a Spanish Notary and signed by both the Buyer and Seller. At this point, the buyer becomes the owner. There are additional documents that the seller is required to provide, which can vary. Expect to see title deeds, proof of payment of the most recent IBI (Impuesto sobre Bienes Inmuebles) property tax, proof of recent utilities and other documents. Again, legal advice will be useful.When the sale is completed, the next step is to register with the Land Registry, and the Catastro. The Land Registry is concerned with the ownership and title deeds of a property, whilst the Catastro deals with the exact location, description and boundaries of the property. This then ensures that all property tax correspondence is sent to the new owner.As part of the purchase process, various taxes will need to be paid, and a rough guide is to budget for an additional 10% over the purchase price. The taxes paid buy the buyer will be negotiated by the chosen lawyer. For off plan properties, the IVA (Impuesto sobre el Valor Anadido) the equivalent of VAT, of 7%, IAJD (Impuesto Sobre Actos Juridicios Documentados), Tax on Documented Legal Transactions, and the Plus Valia, the capital gains tax on the increase in value of the land. Legal and Notary fees usually amount to approximately EUR2000.Owning a property in Murcia is no different to owning anywhere else when it comes to ongoing costs. When budgeting, be sure to allow for community fees, such as for the upkeep of the pool and gardens if applicable. Utility bills are similar to UK costs; however there may be a connection cost in the beginning.Various taxes will need to be paid, and the tax situation depends on residential status. The IBI (Impuesto Sobre Bienes Inmeubles) or community charge and the Impuesto Sobre La Renta (Letting Value Tax), the amount of which varies on residential status are paid on the property. The Impuestos Sobre la Renta de las Personas Fisicas or Income Tax is payable on all income for permanent residents and only for income earned in Spain for non residents. The Impuesto Sobre el Patrimonio or Wealth Tax is calculated on the value of assets including property and bank balance. As tax is a complicated matter at the best of times, professional advice on tax matters is highly recommended.Despite it looking a complicated procedure, and lots to remember, buying a property in Murcia is highly recommended, and there are many experts who can help along the way.

What to Ask When Looking for a Good Property Manager

If you’ve ever searched for a good property manager before, then you know how difficult it can be to find a good one for your rental property. There are several property managers out there, probably more than what you really need to bring your property into the market.With so many choices available, you may find it difficult to choose one for your unit. But don’t worry – if you ask the right questions while shopping around for property managers, you’ll get a better idea of who would make the best fit for your property. Ask them these questions when discussing your property to see if they’re the right property manager for you:1. What type of properties have you managed?Experience counts for a lot in property management, and it can separate the good ones from the ones you should steer away from. Experience in this field, however, isn’t just about the number of years worked in the field; it’s also about what type of properties they’ve managed. Depending on what type of property you have, you can either go with someone who specialises in managing properties like yours or someone who has more varied experience managing different types of properties.2. How do you screen potential tenants?Screening potential tenants is one of the most important steps to property management, so the way they do this often reflects their level of service to your property. Ask them how they’ll match tenants to your property and what their process is like for finding tenants. This will give you a better idea of how they operate and what lengths they’ll go to find the right match for your property.3. How do you handle late payments by tenants?Finding tenants is just one phase of property management; the longer phase involves managing the tenancy itself. Asking them this question will show you what their management style is like and how they’ll deal with critical rental issues like these. See if their process aligns with what you expect them to do and how you want your property to be managed.4. How do you respond to complaints?Similar to the previous question, this question allows you to gauge how well a potential property manager will handle the landlord-tenant relationship. Remember that a property manager will act as the mediator between you and your tenant, so it’s important that you’re comfortable with their process for dealing with any complaints or issues.5. How often do you do inspections?Routine inspections are important to any tenancy agreement, and the number of times it’s done per year will help give you better peace of mind as the landlord or owner. This question will also show you how well the property manager will look after your property even after the start of the tenancy.6. What’s the right rental price for my property?If you’ve done your research beforehand, this question will let you assess how well a potential property manager knows the market and what they can offer you. It also allows you to get a better idea of what your property is worth in the current market. Compare their answer with different property managers to see what they offer and to better understand where your property stands in the market.7. What are the things I can do to improve my listing?Asking them this question won’t just reveal their expertise in property management, but it’ll also help you put your property in the best position in the market. Note their suggestions, assess how relevant they are, and decide whether or not they can get your property where you want it to be.8. What are the full costs and fees for managing my property?Some have small sign-up fees but a variety of hidden fees once you sign on and let them manage your property. Avoid getting surprised by such fees, and ask them to indicate all management and service fees included in their service. The more complicated their fee structure is, the bigger the headache (and expense) it will likely be.9. What can you do that others can’t?This is where prospective property managers will try to sell you on what they offer and how well they set themselves apart from the competition. It’s also the part where you assess the intangibles in any working relationship, giving you a better idea of how well they meet your standards. Listen well, take notes, and assess if they provide what you’re looking for.With so many choices available today, finding the right property management company can be difficult. But by asking the right questions and doing your research beforehand, you’ll find that all the hard work you put into finding the right manager will be worth it. Once you find the right one, your property (and wallet) will surely thank you.