Watch out – property spruikers are back

It happens every time the property cycle turns and the media delivers good news about property.

PLoan For House Conceptroperty spruikers come out again taking advantage of naïve property investors.

Recently the Australian Financial Review reported that  property investors are being offered “no deposit” townhouses in outer suburban areas such as Pakenham, a satellite suburb about 60 kilometres south-east of Melbourne.

The AFR explained that in order to move their stock developers are “deferring deposits” that are paid over five years with no interest.

However, borrowers must have $10,000, a “good credit history” and the ability to borrow.

Buyers are also being offered lucrative incentives, ranging from low deposits to top-range fixtures, in a bid to clear high-rise apartments, particularly around inner Melbourne and Sydney.

But here’s the problem…

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Financial advisers, brokers and accountants are being offered commissions – often between $30,000 and $90,000 – for recommendations that lead to a sale, with extra incentives for multiple sales.

Now that’s a huge commission and shows the desperation of developers to move this secondary stock.

And while it is not always seen as a commission buy the purchasers because it’s paid by the developers, clearly the cost eventually comes out of the purchaser’s pocket as it is hidden in  to the sale price.

Of course you’d have to be a very brave investor to buy into the new high rise blocks considering all the concerns regarding their structural integrity.

So what is a spruiker?

The ACCC explains that property spruikers are motivated to gain money at your expense.

They suggest you don’t risk your money and assets because of their misleading advice and that you should always get independent, professional advice before making any investment.

Be wary of:

  • high pressure sales tactics rushing you into decisions, signing contracts or paying fees (including discounts offered to seminar attendees who sign up on the day)
  • Agressive Talk Communicationproperty deals where the spruiker supplies mortgage broking, conveyancing / settlement or tax advice
  • the suggestion the spruiker’s scheme or system is ‘government approved’ by frequent reference to the Australian Taxation Office (ATO) or Australian Securities & Investments Commission (ASIC)
  • spruikers offering personal loans or credit to help you pay the enrolment fees for training courses
  • property investment strategies that put your current home at risk by using the equity to borrow significant money to invest
  • claims of capital growth rates that may not be independent or credible
  • spruikers who side-step questions or downplay the risks and costs involved
  • the promotion of a particular property development as the spruiker may be receiving a commission or have an undisclosed interest in it
  • offers to buy properties interstate that you have not seen, or off-the-plan properties that do not yet exist.

My disclaimer:

I have been running property education seminars for over 17 years, but I have never sold any properties at the back of the room.

Metropole AdviceIn fact I’ve never sold any properties at all. 

For 17 years I have been running educational seminars, writing books and blogs as well as mentoring clients personally to help educate them to a level of financial fluency so that they won’t be “sucked in” by dodgy investment schemes.

Having said that I know some people who despite getting this type of education have still been lured by the promises of get rich quick schemes and unfortunately lost out significantly.

Just to make things clear…  my team at Metropole and I have never sold properties, instead we give independent, unbiased strategic property advice and then help our clients implement the wealth creation plan we have devised together through property advocacy.

Similarly, last year when ASIC warned a large number of property seminar promoters and property “educators” we were not on that list.

So what`s the alternative?

Business AdviceAt this stage of the property cycle, where not all properties will increase in value strongly, correct property selection is critical, so if you’re looking for independent advice, no one can help you quite like the independent property investment strategists at Metropole.

Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.

Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and

If you’re looking at buying your next home or investment property here’s 3 ways we can help you:

Sure our property markets are improving, but correct property selection is even more important than ever, as only selected sectors of the market are likely to outperform.

Why not get the independent team of property strategists and buyers’ agents at Metropole to help level the playing field for you?

We help our clients grow, protect and pass on their wealth through a range of services including:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now! Click here to learn more
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
  3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.

NOW READ: How to spot a property spruiker in 3 steps

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Michael Yardney

About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Watch out – property spruikers are back' have 4 comments

    Avatar

    October 9, 2019 Marinko Jezabek

    Hi Michael,
    I recently saw an advertisement on face book with the following statement. 𝑾𝒉𝒂𝒕 𝒊𝒇 𝒚𝒐𝒖 𝒄𝒐𝒖𝒍𝒅 𝒎𝒂𝒌𝒆 𝒂 𝒄𝒐𝒏𝒔𝒊𝒔𝒕𝒆𝒏𝒕 𝒎𝒐𝒏𝒕𝒉𝒍𝒚 𝒊𝒏𝒄𝒐𝒎𝒆 𝒇𝒓𝒐𝒎 𝒓𝒆𝒂𝒍 𝒆𝒔𝒕𝒂𝒕𝒆… 𝑾𝒊𝒕𝒉𝒐𝒖𝒕 𝒈𝒆𝒕𝒕𝒊𝒏𝒈 𝒂 𝒃𝒂𝒏𝒌 𝒍𝒐𝒂𝒏 𝒂𝒏𝒅 𝒘𝒊𝒕𝒉𝒐𝒖𝒕 𝒂 𝒅𝒆𝒑𝒐𝒔𝒊𝒕?
    The provided website is event.knowledgescource.com.au
    Are you aware of this firm ? It sounds far fetched from the onset. Your thoughts would be greatly appreciated.

    regards

    Reply

      Michael Yardney

      October 9, 2019 Michael Yardney

      Marinko
      Thanks for the email – I often get questions like this privately and I have a policy of not speaking about other people’s businesses or claims specifically.
      However, I think I’ve made my point well in the article you have just read. the problem is there are too many people out there who want to get rich quickly without developing financial discipline or the ability to save money. I’ve been investing for well over 40 years now and haven’t found a way of doing that. And if the promoter has a way of doing that without investing any more of their money why wouldn’t they be doing it?

      Reply

    Avatar

    October 8, 2019 Greg

    You might want to clarify this point a bit more Michael .
    “property investment strategies that put your current home at risk by using the equity to borrow significant money to invest”
    Otherwise all property mentors, coaches, property advisors will be spruikers as well considering they all say the same thing about using your equity to buy a investment property.

    Reply

      Michael Yardney

      October 8, 2019 Michael Yardney

      Greg – prudently borrowing against an investment grade asset and having financial buffers in place mitigates your risks

      Reply


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