Since time immoral, human beings have been hoodwinked by get rich quick schemes.
Whether it was Tulip Fever hundreds of years ago, or Bitcoin mania just last year, something within a significant proportion of the population means that many of people forever search for a way to become rich overnight.
The truth of the matter is that there is only way to become rich – and that is slowly!
At a time of falling property values, though, that is not what many beginning investors want to hear.
Instead, they continue looking for a magic potion to make money in the current slump phase of the property cycle.
Unfortunately, many will be hurt by property spruikers selling get rich quick schemes in the process.
As is usual practice when the property markets are less buoyant, currently there are charlatans suggesting you can get into property without any money of your own or even via bypassing the banks.
I've seen these schemes come and go and the only people who get rich quick are their promoters.
Here are a few schemes to be wary of.
One scheme that never goes away is using options to become wealthy.
Options involve putting an “option” on a property to buy it at a certain time in the future, perhaps when zoning has favourably changed to allow development.
Of course, if that doesn’t happen, then you could wind up buying a dud or walking away from a deal that kept you out of the market for years while you waited in vain for an event that never happened.
A few of these "landbanking" schemes have ended up in court with the promotors being heavily fined, but that didn't change the fact that their unsuspecting investors lost all their money.
Property owners around the world have been caught up in the aura of Airbnb over recent years, believing big profits were almost guaranteed.
The reality has been that most people have made some pocket change because of the costs involved in using the platform, such as cleaning expenses after every guest, as well as more supply than demand in most locations.
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And now legislation in Sydney has been introduced a cap on how many nights investors can rent out their properties on Airbnb and Melbourne landlords are faced with new legislation designed to deter investors from listing their properties on Airbnb.
Over the past decade in particular, many people have believed the granny flat hype and dutifully constructed a self-contained dwelling in their back yard.
They hoped it would super charge their cash flow by extra rent, but often they realised that not many people wanted to live outside someone’s back door.
At the same time granny flats often added less value to their property than they cost to construct.
Plus, when it came time to sell, they realised that not many other people were as keen on granny flats as they were.
Another supposed “wealth strategy” has been to rent out your investment property room by room – like a boarding house in essence.
Again, this would seemingly skyrocket your cash flow.
In reality, however, most people realised that renting room by room brought with it the myriad problems that are associated with unrelated people trying to share the same spaces at the same time.
As you can see, such schemes will never make anyone wealthy.
Rather, they will likely end up costing them time and money.
When market conditions aren’t ideal, sometimes the right thing to do is nothing.
If you can't afford to get on the property market at the moment or haven't developed the savings discipline to get a deposit, then maybe it's best not to buy a property at the present time.
Savvy investors buy when it’s the right time for them, regardless of market conditions.
And they stick to a proven strategy that sees them select investment grade properties that will outperform the averages over time – not overnight.