Investor: Ben Kingsley

BEN KINGSLEY
CEO and founder, Empower Wealth 
North Melbourne, Vic

Is it harder to get investment loans over the line?

For the first or second investment properties, lending options are usually available to find a suitable lending solution. After this point, depending on the property’s immediate income-producing potential, it usually gets harder to meet servicing requirement for most lenders, as most properties require clients to put in some of their household surplus income. As you grow a portfolio bigger, it can get even harder, especially if the portfolio building plan is to acquire several properties over a relatively quick period, like five properties in, say, seven to 10 years.

Are there any common issues you encounter with investors?

There are a couple of common themes, but they are often just ‘human nature’ type responses. For example, if we locate a great investment property and we secure it for a client, and 12 months later the value of the property has increased significantly, the natural reaction of our clients is to think it is easy money and they want to go again and again real quickly. So we have to remind these clients it’s not always that easy or that simple. There will be times when the values plateau or correct slightly, so we need to remind them to keep their heads and stick to the plan.

The other common theme is that people sometimes forget it’s a high-value item and there is a lot at stake in terms of potential losses and general investment risks, as with other types of investments. It’s important to ensure your clients understand the risks and make informed decisions about this when assessing the reward.

How demanding are investor clients?

Happy investor clients aren’t demanding at all; in fact, the only demand comes from wanting to potentially repeat their success story more often than not. It’s all about educating your client and ensuring you develop a tailored solution around what they are trying to achieve. If you do this well, then you are better placed to only get contacted when they are considering going again or on occasions when they are seeking some advice around their property manager and tenant.

Do investor clients require much education?

Yes, they are looking for knowledgeable advisers who know their specialisation well. Our finance advisers are specialists when it comes to lending strategy and structuring, because it’s such an important part of the overall plan. They leave the property stuff up to their experienced and qualified colleagues instead of the potential of ‘slipping up’ on property matters. Having a little bit of knowledge about property investment is like a GP having basic knowledge about heart surgery: you wouldn’t let him operate or take his advice as that of a specialist heart surgeon because your life would be at risk. Although your life isn’t at risk with getting basic property investment advice, your client’s financial well-being certainly is.

What are the long-term benefits of taking on investor clients?

Sticky, loyal clients whose lending balances remain strong for a very long period as they build a property portfolio. They are very rewarding clients to work for, as over time you are making a significant contribution to their wealth base and passive income for retirement.

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