TradeMe Vs Property Investment Company - What’s the best way to invest in property for me?

Date Published: 12/05/22

LM b W

Laine Moger

Journalist and Property Educator for 6 Years
Introduction

If you want to invest in property, there are a few ways you can find the right one for your portfolio property.

You can choose the DIY approach and use TradeMe.

Or, you might decide to use a specialist property investment company, like Opes Partners (that’s us). But there are other property investment companies too.

Both have their pros and cons, and there isn’t one right fit for everyone.

In this article, you’ll learn the 6 differences between buying a property off TradeMe and using a property investment company.

This means you can decide which is the better option for you.

Opes Partnesr vs TradeMe
What Does It Look Like?

What ways can I purchase an investment property?

Let’s begin by going through what it’s like to purchase a property through these two channels.

Let’s start with TradeMe and then dig into property investment companies.

What’s it like buying an investment property through TradeMe?

For investors who prefer to fly solo, you can start hunting for investment properties on TradeMe. This is the DIY option.

There are pages of properties to peruse through. This includes both New Builds and existing property searches.

Trademe vs Opes

When you’ve found a property you like, you’ll request more information and ultimately purchase the property through a real estate agent or sometimes a representative of the developer (if buying a new build)

Because of how many listings exist on TradeMe, there is a high chance you will deal with a different real estate agent for each property you’re interested in.

Once you’ve found that property, it’s time to do due diligence. With this DIY option, you are in the driver’s seat.

So, you’ll find and engage your own team of professionals (e.g. lawyer, accountant, mortgage broker). Then you’ll work your own way through due diligence

Once you confirm and go unconditional on the property, that’s generally the end of the (commercial) relationship with the real estate agent. Though a good one will also stay in touch.

TradeMe is a great option for investors who have experience buying property before. These investors have gone through due diligence a few times already. They have a support team of lawyers, mortgage advisers and accountants ready to go.

What’s it like buying a property through a property investment company?

If you decide to use a property investment company, on the other hand, the steps you take will be different.

For instance, instead of starting with the properties, your first step is to work with a financial adviser. Here, you’ll discuss your long-term financial goals and how you can use property to achieve those goals.

You’ll decide on a property investment strategy. And then, once you have built your plan, that’s when you start looking for properties.

Your financial adviser (we call them Property Partners at Opes) will then select a few properties for you to consider.

Generally, when you work with a property investment company, they’ll be looking at New Builds for you.

Once you’ve chosen your property, you’ll go through due diligence.

Your financial adviser will recommend mortgage brokers, accountants, and lawyers you can use to aid this process. That’s if you don’t already have your own relationships.

And because you’ll be primarily investing in new builds, they’ll work with you to get ready until the property is built and finally settled.

Property investing with non-bank lenders

Because you’ve created a long term plan with your financial adviser, the relationship is ongoing. It goes passed buying the first property. Ideally, they’ll help you until you meet your financial goals.

The service is a good fit for time-poor investors or investors who want a guide to help them through the property investment process.

There are many property investment companies in New Zealand, and you don’t have to use us here at Opes. If you want to find out more about what happens when you work with us, read more about our service here. https://www.opespartners.co.nz/property-coaching

What Are The Differences?

What are the main differences between purchasing through TradeMe and using a property investment company?

Now let’s go through the main differences between buying a property through TradeMe or a property investment company.

Difference #1 – Number of properties you’ll look at

The first difference is in the number of properties you look at.

If you go through TradeMe, you can look through pages and pages of potential properties.

On the other hand, if you use a property investment company, you’ll likely look at 3-5.

The difference is that when you use TradeMe, you need to wade through all the options to find properties that fit your long-term goals.

But, if you use a property investment company, they do that on your behalf.

They’ll look through properties from pre-vetted developers and choose the properties you can both afford and those that fit your financial plan.

Property Investment Company

The TradeMe option is a good fit for investors who want to go property shopping and look at all the options on the market.

However, from our experience working with investors, we also know that having so many options can present its own problems for some people.

For some investors looking at every property on the market can lead to indecision. And that’s because it can be hard to tell the good and the bad investments.

That doesn’t mean that your financial adviser hasn’t looked at a whole heap of options.

For instance, our Property Partners will select potential properties from 58 pre-vetted developers here at Opes.

But rather than looking at 1000+ options on TradeMe, you’ll just focus on a handful of properties that appear to make sense for you.

So the first significant difference is the number of properties you’ll look at.

Difference #2 Property Type – New Builds vs Existing

The next big difference is in the properties you’ll look at.

Why? Most property investment companies almost exclusively focus on New Builds. So if you’re an active investor seeking existing properties for your next BRRRR project – then working with a new-build-focused property investment company won’t be the right fit for you.

 

This is where TradeMe is an excellent fit because it’s a very hands-on, DIY option, and there is so much more choice available.

But, it’s not as suited to investors looking for New Builds.

While some New Builds are listed on TradeMe, the bulk of New Build sales happen either through property investment companies or directly with the developers.

For example, collectively, real estate agents sold 113 new build townhouses in Christchurch (REINZ, Jan 2021 – June 2021).

That’s every real estate agent put together.

Over that same period, investors were recommended (and invested in) 134 townhouses in Christchurch through our team at Opes Partners.

And that’s just one property investment company.

So the bulk of new builds aren’t listed online through TradeMe. They’re available through property investment companies and developers directly.

Difference #3 Developer Due Diligence

However, if you’re considering investing in a New Build, either through a property investment company or TradeMe.

There is also a difference in the vetting process of a developer.

If you work with a property investment company, the properties you view will come from pre-approved developers. By that, we mean developers who have passed each company’s due diligence process.

By way of example, here at Opes, we’ve pre-vetted all of the 58 developers we work with.

That includes looking for red flags and passing each property through a very stringent, 23-step checklist to examine each property from all angles. To find out more about the process we go through, read our article here.

23 steps 001

On the other hand, once a person listing a property pays the fee with TradeMe, the listing goes live. So you, as the investor, then need to do the due diligence on each developer (or property) you look at.

This can be tricky to do correctly and can be expensive – in both time and money.

Difference #4 Price – Can I Get a Cheaper Price If I Negotiate Directly?

Difference #4 is the way that properties are priced.

If you work through a property investment company, the price of the properties you’ll consider is often fixed.

And there is little room for negotiation on the price since they come pre-negotiated.

On the other hand, if you work through TradeMe and a real estate agent, price negotiation is commonplace.

A common and fair question investors often ask is whether they can get a property cheaper if they negotiate with a real estate agent directly, rather than going through a property investment company.

The short answer is no, but there’s a lot more to it.

For instance, TradeMe is a bit less forthcoming with prices when it comes to existing properties.

You’ll often find it hard to get an actual price among all the “price by negotiation” or “auction” sakes processes.

On top of that, you’ll then have to negotiate the price yourself or fight in a bidding war if heading to auction.

This can be positive because the negotiation is in your hands.

BRRRR investors often capitalise on this freedom, using due diligence to catch certain aspects that can be used to further negotiate the price.

 

However, if investing in new build properties, there is much less difference.

This is primarily because a developer can find buyers for an entire building project when using a property investment company.

That enables property investment companies to use their scale to negotiate a sharp price.

Difference #5 Ongoing Support Service

This one is specifically for New Builds.

Let’s say you decide to purchase a New Build through a real estate agent. In that case, you’ll need to work with the developer directly throughout the construction of the property and then prepare yourself for settlement.

That means things like:

Among many other things.

If you’ve opted to go through TradeMe and use a real estate agent, you’ll need to work through these on your own.

However, if you work with a property investment company, they will guide you through this process.

For example, here at Opes, each investor gets access to ClickUp, a project management tool. They then use this software with their customer relationship manager to ensure that every task that needs to be done is completed.

This means that all the I’s are dotted and the t’s crossed.

Click Up Opes

Difference #6 Financial Guidance From The Get-Go

Perhaps the most significant difference is the service and advice you get.

Investors who take the DIY option and go through TradeMe will work with a real estate agent and primarily get real estate advice. i.e. advice on the property itself.

Alternatively, when you use a property investment company, you work with a financial adviser to build a financial plan before looking at properties. This means you get financial and property advice.

This means not just choosing a property but choosing a property and building a portfolio to help you achieve your long-term goals.

By way of example, here at Opes, we use our inhouse software, MyWealth Plan, to figure out:

  • Where they’re projected to be based on what they’re doing right now
  • And then, if there is a gap, how to close it through investment property
Wealth plan Opes

This means that the TradeMe or DIY option is a good fit for investors who already know what they’re looking for and how they’ll use properties to achieve their financial goals.

So if you just want to look at properties, TradeMe is a good fit.

But, if you want help figuring out which properties are the right ones for you, then working with a property investment company could be a good idea.

Which Is Right For Me?

So, TradeMe vs Property Investment Company – Which Option Is The Right Choice For Me?

Whether you should use a property investment company like Opes or head straight to TradeMe depends on your personal situation.

For instance, if you are looking for an existing property to get your next BRRRR renovation underway, TradeMe is a better fit for you.

That’s because TradeMe offers a whole load of choices for you to gander through.

If you are already in this position of BRRRR-property shopping, you will likely have a team of people in place to support your investment plans, which is an essential part of any successful purchase.

But if you’re a busy person who doesn’t have the time to do it on your own; you’d prefer a guiding hand; and you want a new build, then a property investment company is likely the right fit.

When choosing a property investment company, you’ll want to understand the different services they offer.

For instance, here at Opes, our core Wealth Plan service is usually the right fit for investors who have anywhere between 0 to 6 properties.

For investors with a larger portfolio, our Portfolio Review service is better suited.

Who are Opes Partners?

Who are Opes Partners and can they help me?

What is the 3-Step Opes Coaching Programme?

1. Plan out your property investment portfolio

The first step in the programme is to co-create a plan using our MyWealth Plan software. We built this software specifically to help Kiwis create a financial plan in under an hour.

You'll leave this 1-hour session with a written down plan. Pen to paper.

2. Pick properties that fit with your plan

Once you've created your plan in step #1 – your property partner will go out and find properties that fit your plan. They'll search through projects from up to 58 developers to find the best ones for you.

When you meet again, you'll review the top picks, go through the analysis, crunch the numbers together, and then decide which ones to hold with the developer.

3. Dig into the details – Confirm it's the right property for you

Once you've selected a property, you'll work for 10 days to make sure it's the right property for you. So you'll work with your Property Partner and Client Relationship Manager to dig into the details of the property.

You'll go and look at the development and be introduced to mortgage brokers, solicitors, accountants, and property managers. Their sole job is to help you figure out if this property works for you.

And you’ll have access to all the resources, tools, and data … so when confirmation day comes, you have confidence you know you’re making the right decision.

Who is the Opes Coaching Progamme the right fit for?

  • You understand the concept of property investment, but who wants help putting it into practice.
  • You want a “Done for you” property investment service, so you can be a hands-off investor.
  • You are someone who has at least a 10 year investment time horizon.
  • And finally, you’re ready to become a property investor.

Who is the Opes Coaching Progamme is NOT the right fit for?

  • You’re more into the smell of paint or the colour of a wall than the numbers that stand behind an investment property.
  • You only want investments that are hands-on, so you can save a few dollars here and there.
  • You have plenty of time on your hands and want to do the property investment process yourselves.
  • You’re looking for an overnight success and want to get rich quickly.

What does it cost to work with Opes Partners and go through the programme?

It’s free. Complimentary. No Cost.

Why?

The developer pays us a marketing fee when you confirm that the property is the right fit for you. Very similar to the way a mortgage broker gets paid by the bank.

Now it's important to note that we are paid the same fixed rate no matter what property you invest in.

If it’s a $500k apartment in Christchurch or a $1.3 mil 3-bedroom townhouse in Ponsonby – we get paid the same rate.

That's important because then we can recommend the right property for you, and there's no incentive to recommend you invest in a more expensive property, just so we get paid more.

I want learn more about how Opes can help me

Learn more about the Opes Coaching Programme Here

LM b W

Laine Moger

Laine Moger has been a journalist and reporter for the last 6 years. She previously worked for Stuff, The North Shore Times and Radio NZ. She has a Bachelor of Communications (Honours) from Massey University and a Diploma of Journalism from the London School of Journalism.