What they don’t tell you often matters most

As if it’s not enough having to sift through countless reports, articles, brochures and other media when researching a potential investment location, the real issue for property investors is often what’s been left out.

Property project marketers and developers want you to buy their properties so they promote their developments with the best possible gloss and spin.apartment idea develop build city move plan city building inspect urban

This is understandable because it’s up to investors to do their own due diligence and select investment properties best suited to their particular needs and goals.

The problem for investors however, often lies not what’s contained in the reports, advertisements and glossy brochures but what’s been left out.

For example, what if you found some blocks of land being offered at unbelievably low prices with low deposits on easy vendor finance terms?

Smelling a rat, you do some research only to discover that the development is less than 40 kms from the Brisbane CBD.

This land is as far south of the city as Ipswich is west and Caboolture is north with land prices less than half of those cities.

The Russell Island Land Scam

This is what happened in the early seventies, in what became known as the Russell Island land scam, and the story contains warnings for investors today. 

The island is one of many in Moreton Bay consisting mainly of sand dunes, mangroves and mud crabs, yet these islands are only a stone’s throw from the heart of Brisbane.

Seeing the opportunity, developers conducted some hasty surveys and bought up land.

They had Russell Island rezoned residential because it was located in Moreton Bay, beyond the ambit of local government regulations, but were then faced with two major issues – the only way to get Brisbane was by boat and some of the island went underwater at high tide.

The innovative developers solved these problems by taking the aerial surveys, mapping and promotional photography at low tide and the state government also came to the party by making vague promises to build a bridge to the island.

The resulting subdivisions saw 20,000 suburban lots placed onto an unsuspecting housing market and property investors rushed to buy their piece of island paradise at bargain prices. brisbane-1251488_1920

They all sold quickly as it was obvious to anyone who had read the property marketing spiel that Russell Island was about to become one of the most prestigious new suburbs of Brisbane.

Over forty years later and the bridge to the mainland is yet to be built, but buyers who wanted to develop their lots discovered far more pressing issues.

Not only were the blocks of land lacking town water, sewerage or power, most had poor drainage and could never be improved.

In fact, some investors discovered that their blocks disappeared at high tide and were worthless.

There’s nothing wrong with Russell Island as an investment these days, but many investors sucked in by the original developers lost all their money.

If it sounds too good to be true it probably is, yet investors are continuously being roped in by offers of high rental yields, fantastic capital growth, positive gearing, rental guarantees, unlimited potential for development, overseas property bargains or cheap options to buy land.

It’s what the promotional material often doesn’t tell you that can be crucial


Those high rental yields could be caused by falling prices, the fantastic capital growth claims may turn out to be erroneously based on past performance, positive gearing promises could make use of rental guarantees built into the purchase price, the development potential may be without any evidence of actual demand, those overseas properties could be located in derelict precincts of decaying cities and the options to buy may be in rural backwaters that will never actually be subdivided.

Getting information before you make any property investment decision is important, but getting the all the right information you need to make the best decision is crucial.


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John Lindeman


John Lindeman has well over a decade of experience researching the nature and dynamics of various types of assets at major data analysts and is a leading property market researcher, author and commentator. For more information visit Lindeman Reports.

'What they don’t tell you often matters most' have 3 comments


    December 12, 2017 James

    Real estate agents are still selling the same lie sucking people in about a “bridge” that will never be built. The agent who sold me a block even took me to a place that he said was ‘earmarked’ for the bridge. I would never have bought there had it not been for the prospect of the bridge becoming a reality.



      June 3, 2018 Vincent Trivola

      The is a possibility that a bridge to Russel Island could be built, and a couple of private studies show that it could be a viable proposition if wisely managed. It is a fair bet that certain parties in the know will be tipped off beforehand, so they will make some nice profits when values, after the bridge is built, will rise substantially.



    October 28, 2015 Dr Mark Debowski

    Thank you for this great article. Do you know of other swindles using different strategies that are worth noting? Please share them with us.


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