There are bad apples in every bunch, and property is no different from any other industry.
Unfortunately, the property sector is largely unregulated when it comes to fraudulent "aficionados" because a license isn’t required in order to describe yourself as an "expert".
And now with the housing markets around Australia booming again, there's a new breed of so-called "experts" out there offering you investment advice.
So, it’s up to you to spot the Real Deal from those who are only in it to line their own pockets.
But how do you know who can walk the walk, and who’s just talking the talk?
Spotting the deception at play…
The main goal of a property spruiker is to profit.
If this means they gain money at your expense, so be it.
They do this in a growing number of ways, ranging from the blatantly obvious to downright sneaky, and their ploy can often start with something as simple as a phone call or a Facebook message.
They might offer you tickets to a "free" webinar that promises to teach you how to become wealthy quickly, or they might offer a phone call with one of their "expert consultants" to discuss the benefits of investing, but whatever their approach, it’ll likely sound too good to be true.
The aim is just to pull you in with intrigue and the promise of big money, and unfortunately for many unaware Australians, it works.
If you’ve been approached by someone peddling something similar to the above, put on your detective cap and get sleuthing.
- Also read:Average time it takes to sell a property has dropped
- Also read:The Sydney regions which have reached their price peak
- Also read:What a change in government means for Australia’s property market
- Also read:RBA tells workers to take a “real” pay cut to help the economy | Property Insiders [Video]
- Also read:Latest property price forecasts for 2022 revealed. What’s ahead in our housing markets in the next year or two?
Google their name and the company they claim to be calling from.
Check out their website (and if they don’t have one – that in itself is a huge red flag), their Facebook and other social media pages, and listen to your instincts.
If they’ve got a site that seems informal, unprofessional and lacking in detail, take that as a warning sign.
If a Google search ties their name to previous scams or bad reports, take that as a definite sign of shiftiness and cease all contact with them.
Some more "red flags" to be aware of are:
- Someone who has a stock list of properties to sell you.
- Anyone who offers "advice" before they have found out all about you, your needs, your plans, your risk profile.
- Feeling pressured to rush into saying yes quickly to whatever it is they’re offering, whether it’s deciding to attend a seminar, signing up with their company to gain advice and any other sales tactics.
- Any suggestion that their scheme is approved by a government sector like the Australian Tax Office or Australian Securities and Investments Commission (if you’re told this, a simple phone call to that sector can help you confirm whether it’s true or not, and if it’s not they will be able to provide sound advice as to how you can deal with the spruiker).
- Your spruiker offering to help you pay any fees by way of a personal loan or credit allowance.
- Sidestepping or refusing to clarify any questions or concerns you might have (because an unwillingness to be helpful or transparent just screams dishonesty).
- Downplaying the risks and related costs that are involved in property investing, and/or an inability to substantiate their claims of profit and success. If they’ve helped so many people achieve success, where is the proof of that?
The Real Deal
Luckily, there are a range of property advisors in Australia who genuinely can help you get ahead financially by providing sound and reputable advice.
You don’t need a licence to be a property advisor in Australia, but there are a number of industry bodies that signify some reputable qualities, such as the:
- Property Investment Professionals of Association (PIPA)
- Australian Property Institute (API)
- Real Estate Buyers Agents Association (REBAA)
Any advisor worth their salt should be willing to show you these industry memberships or certification of skills if you need your fears assuaged, so don’t be afraid to ask questions.
A professional property investment advisor should be clear and concise when explaining the ins and outs of investing to you, and they should be happy to answer any questions you have to ensure you completely understand everything.
An advisor’s goal should be to assist you in matching your investment plan to your risk profile, to help you avoid getting into a financial situation you’re unable to deal with, and they categorically won’t be trying to push you into anything you don’t feel comfortable with.
To get the best advice find a property advisor who is:
- Not afraid to pass on references of their satisfied previous clients.
- Able to show you relevant qualifications and memberships to various Australian industry bodies.
- Take into account your individual situation and circumstances, comparing those with your desired goals, and creating the best strategy from that, instead of just giving you a standard plan that isn’t tailored to you.
- Open in their approach to your investment. Are they explaining all aspects of their proposed strategy? Does it seem reasonable? Are they upfront with their approach or are they seemingly trying to cloud some of the specifics?
- Able to help you negotiate with the seller once you’ve found a property you like.
- Willing to make sure all the necessary checks and repairs are conducted before settlement occurs, in order to ensure everything is above board.