This is a part of a series of articles outlining my experience buying properties with Empower Wealth. I had carefully considered whether to invest in property or the stock market. I am doing both! But my financial plan required us to invest in property first. We plan to purchase two (or maybe three) properties and pivot to index ETF investing. Five years before a fairly early retirement at 55, we will enter debt repayment.
I first heard about Empower wealth by stumbling across the Property Couch podcasts. I greedily consumed 200+ free episodes full of property intelligence.
Being a natural cheapskate shrewd financial manager, I intended to educate myself, select a property and purchase using as much cheap/free information as I could find.
See my article on what convinced me to fork out for professional assistance.
Hopefully, budding property investors will find this article helpful in deciding whether to use the Empower Wealth business to achieve their property purchase.
This is a completely independent review without sponsorship or commissions based on my own experience.
Remember to consider who is paying your financial planner or property advisor. Free advice can be far more expensive in the long run. Most family and friends I know who have invested in property now regret it. They took guidance from commission-based property developers.
What started for them as high expectations to achieve a retirement funded by property ended in stress and financial loss.
Be very careful who you take advice from. If they are well-meaning family or friends, make sure they are now in the financial position you want to be in (ie they have achieved their goals). If it is a professional, you need to pay them (or you are the product!).
I was initially unsure which of the Empower Wealth Services I required. So I spent time talking to several Empower Wealth professionals to understand their respective roles.
It took a couple of weeks each time to get an appointment.
Between my first contact with the company and the actual property purchase was around four months. Part of that was our fault, a family holiday meant we were away from home, unable to give house valuers access and send paperwork promptly.
Empower wealth is based in Melbourne, but offer appointments face to face, by phone or online video conference via Zoom. I chose to video conference via zoom and the process was pretty simple.
The team send a request for you to complete detailed financial information on their website.
This is used to check your current financial situation, that you can afford an investment property, and are likely to secure lending.
If you have already gathered all the information to do your own sums, it doesn’t take too long to put it into the database, and I also found it useful to double-check my numbers.
It’s really important you spend the time inputting as accurate data as possible before your appointment. The information gathered will be used to give initial advice, and then to form a property portfolio plan.
Empower wealth offer lots of different services, including a property portfolio plan, mortgage broker, buyers agent, tax agents and asset protection advice.
If you’re not sure which services you want or need, the initial chat will help clarify.
I did not use the property portfolio plan service. At the time I was scraping together every dollar I could get my hands on.
The buyer’s agent fee seemed like a lot of money, and the empower wealth property plan cost just seemed too much. I felt the first few steps I needed to take were pretty obvious. I found The Armchair Guide to Property Investing very helpful, had made a basic plan of my own with the mother of all excel sheets. My first step was to buy a growth focussed property.
I retrospect, it probably would have been better to use the planning service. Empower wealth could check my thinking, maths and confirm or tweak the plan. I am still unsure whether to buy a 3rd property, but for now, have paused and pivoted to shares. I may still go back to use the planning service to help with this decision.
I did use the Mortgage broker and buyers agent service.
I met first with my mortgage Broker, Sarah, who was lovely and keen to answer all my questions.
The entire company has a streamlined process, so after that initial appointment, things ran extremely smoothly. Maybe the health system could pick up a few hints to provide a more efficient service!
Securing lending was somewhat time-consuming. It involved organizing and sending in lots of paperwork, then getting our house valued in person. It is possible sometimes to base lending on a “Desktop valuation” that is performed without a visit to the property, although for us this came in far lower than expected. Our house is quite different from the surrounding properties, I am guessing this is why the algorithms struggle to value it.
Getting the mortgages structured in the most cost-effective way took some extra time. It took around three weeks for the pre-approval in order for us to start house hunting.
There are many factors other than interest rates that matter for mortgages, particularly for those building a property portfolio. Your mortgage broker can help you navigate the options.
We’ve used Empower wealth mortgage brokers for our second investment property in March 2021. Things were not as well streamlined this time. I’m sure a lot of this was due to COVID, with staff working from home (some no doubt trying to home school as well). I have the impression though that Empower Wealth is suffering growing pains with the rapid expansion of their business as the word is spreading.
Leave plenty of time. I would suggest contacting Empower wealth before you are ready to buy, to get all the initial processes sorted whilst you continue to save. Remember to check your credit score, and avoid any credit checks (eg for credit cards) in the six months leading up to the loan application.
Using Empower wealth’s mortgage broking team gave me a $1000 discount on the buyer’s agent fee.
My initial contact with the buyer’s agent process was for an introductory chat.
I didn’t warm to the gentleman I spoke to. I was horrified at the suggestion that I should buy a property unseen.
I had developed a fair degree of trust in the Empower wealth team, through listening to their friendly and informative Property Couch podcast. But I was still very nervous, terrified of making a mistake with what would be my biggest financial decision so far.
Like a jittery first-time mum being wheeled into the theatre for a caesarean, I needed a lot of reassurance and hand-holding to feel more confident in the process.
I reached out to colleagues online, to find if anyone had used Empower wealth – and the response I got was overwhelmingly positive.
“They are one of the good guys,” wrote one of the doctors I had never met.
“Growth so far has been on target,” said another.
In general, our profession has strong ethics.
I trust reviews from one of us far more than the testimonials on a website, or Google reviews.
It’s just reassuring to hear from one of your own tribe.
I went ahead with the process and asked to be allocated to a buyer’s agent.
A buyer’s agent is a property investment advisor who will help you select a great property with good future value expectations. I spoke to mine, Nicole, via zoom. The experience of meeting her by video chat was great.
She told me about her career and property investment journey. Previously, with financial planners, these transparent attempts to relax a client and build rapport make me cringe and felt incredibly fake, but not with Nicole.
There had to be a leap of faith at some point, where I trusted my property investment advisor Nicole knew what she was doing and pointing me in the right direction, getting to know her helped this.
My buyer’s agent was a very personable, bubbly person oozing with knowledge and confidence, without arrogance. She made me feel completely at ease and comfortable talking with her. Her professionalism, expertise, and interpersonal skills showed in each interaction (and there were many).
The first chat with Nicole was for over an hour, we talked through my goals, my pre-conceived ideas about what I would purchase, and my knowledge level.
She explained the process step by step and what would happen next.
Based on this conversation, she compiled a “Property blueprint” – a lengthy document shortlisting twelve suburbs (Brisbane and Geelong) that she thought were promising.
The document listed key data and explained why the buyer’s agents thought they were a good fit. I had spent quite a bit of time looking at data and trying to narrow down suburbs on my own, before giving up and going with Empower wealth. Only one of the suburbs matched my own shortlist…interesting!
At this point, guided strongly by Nicole, I confirmed Brisbane as my target area, and then the wait began. Nicole was very familiar with the Brisbane market, having purchased many properties there beforehand.
Nicole was soon on a plane to view several shortlisted properties. By this point, my thinking had changed quite dramatically. I trusted Nicole and was fully aware she knew what she was doing. I came to feel my viewing the property wasn’t going to add anything to the process, and may result in too much delay.
The fees at the time of purchase were $15,000 buyers agent, discounted to $14,000 as I also used the mortgage broking service. This seemed like a huge amount of money at the time. In retrospect, it represented excellent value.
Nicole sent me three properties with potential, including detailed video footage of the viewings.
One great property was her recommendation, and Nicole gave me the confidence to make the big decision. I have to admit I was completely terrified. Buying a property is a huge financial decision and I felt wobbly. What if this was a huge mistake? But at the end of the day, I reasoned, I couldn’t do any more meaningful research that would make me more sure of my decision. I had to (reluctantly) accept some minimized risk. I am no gambler!
Then came a few days of back and forth discussion and negotiations. There was another interested buyer who had also put in an offer.
Nicole helped me set an appropriate price to offer. She saved me her fee right here as I would have offered more to ensure we sealed the deal. Nicole’s experience was invaluable in knowing where to set the price and other factors that we could use to make our offer look more attractive. She also put stipulations in the contract for the seller to perform certain repairs.
I was surprised by how much negotiating power my buyer’s agent thought we had, especially as I was competing with another buyer! I think the involvement of a professional buyer’s agent made our offer more attractive – the settlement was expected to be smooth and uneventful.
It turned out a quick settlement was what motivated the seller, and I had the team execute the deal fast!
The contract was signed, buildings and pest inspections and solicitor work ensued. My buyer’s agent assisted with interpreting the buildings and pest inspection report.
The team took me through everything step by step. They integrated with the solicitors, buildings and pest inspectors seamlessly as they frequently use their services. Like in a well-run resuscitation, there were clearly delineated roles and plenty of closed-loop communication. Everything ran smoothly.
The bank coughed up the cash as expected, and I was the proud owner of my 1st investment property.
The Empower Wealth team then suggested a choice of rental managers, and the search for a tenant began before settlement.
I got to see the names, ages, professions and even income of the tenants, and also what pets they owned.
I had planned to avoid tenants with pets, as I was concerned about damage, but all four tenants had pets. Advice from my rental agency was that it would be difficult to find a tenant without pets and that laws are changing so that tenants cannot be discriminated against for owning pets.
So again, I had to take a leap of faith that it will be OK, organized building and rental insurance. Fingers crossed these tenants and their pets are well behaved – they sound just lovely.
Empower wealth offers a free cash-flow management platform on their website called Money Smarts. Their system is described in their “Making money simple again book“.
The Money Smarts system is available free to anyone who wants to manage their finances for a better future.. You do not have to be an Empower wealth client!
I based my investing plan on conservative assumptions. My calculations were based on 6% interest rates (interest rates are currently <3%). I made sure I had buffer money in my account, in case of unexpected expenses.
With this (and, admittedly, a strong income) debt repayments have not been onerous. The rent lands in our account. The mortgage repayment goes back. There is a shortfall, but it’s very manageable.
Empower wealth advertises their testimonials from satisfied clients. Financial Advisory Client Testimonials – Empower Wealth I confess, I am always doubtful whether these testimonials displayed on websites are genuine. But I am pretty much converted to a raving fan after my experience. Empower wealth wasn’t perfect, but they were a damn sight closer than any other professionals I have engaged in the past.
Overall I was extremely impressed with Empower Wealth‘s service in helping me buy an investment property. If you want to read what happened next, read the update: Do I regret investing in property: the first six months. And then, for my experience as a landlord through the global pandemic and beyond!
Find out about the Victorian residential tenancy act changes. future plans property plan retirement plans fantastic model property couch only time will tell
Aussie Doc Freedom is not a financial adviser and does not offer any advice. Information on this website is purely a description of my experiences and learning. Please check with your independent financial adviser or accountant before making any changes.
* indicates required Email Address *