Sharyn Burgess explains how investors can avoid the mistakes of poor spending habits, emotional attachment and choosing the wrong broker.
Sharyn is an experienced finance expert with over 15 years of lending industry experience, having worked as a bank lending manager, loan administrator and mortgage broker.
She told KnowHow’s Bushy Martin on Property Hub’s Get Invested podcast how property buyers and investors can take control of their finances, maximise their borrowing capacity, gain quality support and expand their options.
Investing mistake: Poor spending habits
It’s the small and seemingly insignificant spending habits which can actually limit a property buyer’s finances and borrowing capacity.
“There are a lot of simple things we can do to optimise property purchasing power and capacity. There’s the obvious ones of getting rid of those credit cards or consolidating some of those personal loans. But what a lot of people don’t realise is that the discretionary spending, so the day-to-day and in the world of the tap, tap, tap the card on the machine, leads to people losing touch of how much they’re actually spending. So if you sit down and you look at even just the last 30 days in you’re bank account, that’s when you can understand what’s going on in your own finances,” Sharyn said.
“And all you need to do is set a little trigger for yourself. So we have all these hints and tips and tricks of how to set your own little triggers to kind of go, okay I’m at my capacity now for that week or that month or whatever it is. But a lot of people are not taking the time to set up these little alerts.”
Bushy added: “It all starts there. It starts with the little things, and if that discipline starts to build, another thinking approach starts to occur, then that starts to ripple out into everything you’re doing”.
Investing mistake: Getting emotionally attached
Sharyn identified the number one mistake property buyers and investors make in their search is getting emotionally attached to a property, area or concept.
“For example, if you get somebody that is buying a home that they’re going to live in, if they fall in love with it and are emotionally attached to it, they will generally pay more because it has to be this property. And it’s one of the biggest mistakes I think people can make,” she said.
“And the same thing on the flip side for investors is they might actually choose to invest in their own backyard because of their emotional attachment to be able to do a drive by on the property ad hoc to check up on them. And we quite often do some coaching with our clients to sort of go, well actually an investment property is a business transaction. Let’s keep it over here so you can’t see it, so then you’re just focusing on the numbers.”
Investing mistake: Limiting your options
Sharyn talked about how property buyers and investors can expand their loan options and gain more long-term support when engaging with a savvy finance broker as opposed to going direct to a bank.
“Let’s put knowledge at number one. A good broker can isolate what it is that you need, how to strategically design that lending that’s best for your risk mitigation, and then where can we put that that’s best for them,” she said.
“So in really simple terms, a bank will have a limited number of loan options. So you’re limited as to what you can choose. And then also, there is no training in how to strategically place the lending in the right manner for your protection, the client’s protection. The training at the bank level is all about bank risk mitigation and bank risk protection, and they don’t even teach the lending managers that there are different ways. They just say it’s this way. And it might be cross collateralising in properties and things like that, which we avoid at all costs.
“A great finance broker has also lived the journey, and they draw on that journey to come from an empathetic space to understand what that client needs. So most brokers can get somebody a loan, but at the end of the day, do you want the loan or do you want somebody that’s going to absorb most of that stress and hold your hand along the way and get you there, and then celebrate at the end and cheer you on, and then check in with you every 12 months to say, how’s it going? Is it okay? Do you need any help? You know, it’s the support, and they’re not going to get that from the bank level.”
Investing mistake: not surrounding yourself with a professional team
Sharyn delved into the benefits of teaming up with a brokerage as opposed to a single finance broker.
“Anybody out there who’s raising children knows it takes a village, and brokering is no different. It really does take a village to get this right. For me, I’m cocky enough to know that I’m really good at what I do, but I’m intelligent enough to know that I can’t do it on my own. I can’t tell you the amount of times I pick up the phone and call one of the other brokers within our group and say, ‘oh my gosh this is happening’, and they go ‘that’s nothing, get a load of this’,” she said.
“So it’s way less isolating. There’s a support network, it’s a team environment, and we champion each other along the way. How that transpires across to a client when they enter into a single broker versus a brokerage is that the right teams have a family unit in place. So if for any reason that broker needs to be with their family that day because their child has medical appointments or something like that, there’s somebody in the background that’s got your back and they’ll help answer questions and keep the client on the right journey and calm and happy. And that’s exactly what we want.”