Acting as buyers agent for friend

Hi All,

I have a few friends that don't enjoy looking for property and have jokingly offered to pay me to find them a property (as I generally enjoy it).

I've been thinking about the offer but it would only be a side business, not a full time job.

Would I need all the usual licenses and insurances to source properties for a friend?

Appreciate any advice or suggestions

 

If a friend is going to give you a few bucks to help them find a property, that's nice.

If you're thinking of running it as a side business (full time or not), you need to get licensed, insurance and all those fun things.

 

Yes licence needed

 

Yes

 

A license is needed even for a friend if a fee or reward is involved even if its a nudge nudge wink wink deal. This also means insurances etc. Ditto just about any profession. Its also not deductible or a CGT outgoing for them if it is a private arragement despite it being asseassable income to you. Its not necessarily or lawfully incurred.

 

It is always risky to mix business with friends or relations.

What if, further down the track, they are unhappy with the property? Or it needs unexpected expensive repairs? Or the market tanks and the property loses value?

And yes, if it is going to be a business you must treat it as such - licences, insurance etc.

 

If it is just a couple of cases of free ****... then I can't see the harm and don't need a license.
But if you are charging him 2% finder fees like a BA even for once off deal.
I think you would be incline for taxes, and liabilities...
Is this worth it losing a friendship? For the WHAT IF!

 

Related to the discussion above. If a pty ltd company with myself and my spouse as directors is used to manage and maintain several properties across several states and territories that are owned by myself my spouse and our smsf (as tenants in common), does the pty ltd company and / or the directors of the company need to have real estate agent licenses?

 

You will need to clarify this with the regulator (Fair Trading) in each state as it will depend upon how the legislation is applied in each jurisdiction.

Some states may consider the company a separate entity from the owners which would require licensing.

 

In NSW

See PROPERTY AND STOCK AGENTS ACT 2002 - SECT 9 Corporations require corporation licence and look at the words defined in the act. 'agent' and 'real estate agent'

 

Why not limit your exposure to inspecting property that the friends wants you to check? And receive payment for your time?

As soon as you are telling them what to buy ...... that's the issue.

 

I am so interested in how this went? Did you end up purchasing a property for them?

 

@Nathan Prasad nah unfortunately I gave it a miss. Looked into setting it up legit, but a lot of work for a 1 sale. Decided to put my time towards other pursuits