Some of the most dangerous advice you are every likely to receive about property investment comes from people who have their own interests in mind, not yours. They will invite you to a free boot camp, workshop or seminar, offer free property education courses or supply you with free booklets and other material.
Their motives may at first appear honourable, but their aim could be to get you to buy a property from the sale of which they will receive some reward from the developer or project marketers. In other words, they have their own best interests in mind rather than yours. This sort of activity can even come from people who you would think should know better, such as mentors, motivators, developers, project marketers and real estate agents.
The promises of future rewards are usually clouded in terms of a suburb’s past performance, or population growth forecasts. They may trot out a “rating” or “score” for the suburb that assures you of its price growth potential, or talk enthusiastically about the new retail, educational, health or transport developments that will transform the area and unleash a huge rise in housing demand.
How to recognise the wolves in sheep’s clothing
1. They will only put forward brand new or “off the plan” housing, because they stand to get a reward from the developer or project marketer such as a commission, knock on, kick back or finder’s fee for finding them a buyer.
2. They will claim to “do the searching for you”, or find you “off market properties, or “have access to properties priced well below market value”.
3. The offers will be couched in seemingly attractive deposit terms and usually come with rental guarantees. Remember, that no matter how attractive the deposit terms or rental guarantee may seem, you are paying for them in the final purchase price.
4. Ask them how they get their money – there is nothing wrong with mentors and other experts expecting you to pay for their services, but if their reward comes from the sale of the properties they are promoting, you are paying for their services in the purchase price.
5. You can also unmask such wolves in sheep’s clothing by Googling them to see what past investors have said about their activities or what their track record has been in terms of actual performance.
There are however, proven and relatively inexpensive ways to find the best investment areas in any housing market at any time – by using the predictive methodologies invented by renowned property market analyst, author and researcher John Lindeman. John’s patented system tracks buyer, seller, investor or renter demand and supply trends to predict the potential for house or unit prices to change at suburb level.
Reports using these methodologies can shortlist suburbs with the greatest imminent price growth potential and the least risk of short term price falls to occur.