Property no doubt is a stand out asset class of the last decade; with the last 5 years supercharged with supportive macro economic conditions, low interest rates and a tight supply market. You can build significant wealth with the right property and finance facility. These so call "property spruiker" often take advantage of this sentiment to sell unsuspecting investors overpriced properties and inflated home loans on promise of owning your property(s) faster. Trust your gut; if it is too good to be true, then more than likely it is. Below are the red flags to look out for when considering your investment in property.
- Invite people to their free “wealth creation” seminars with the promise of investment tips or "hidden" opportunities not available to the general public.
- Provide economic and macro information supporting the need to provide for themselves through property and potential outcome if you don't (i.e. poverty).
- Use negative gearing in residential property and scenarios on mortgage being quickly repaid leveraging rental income from the investment property and the potential tax savings.
- Being pitched to investors certain properties that often interstate, located in lower social-economic ares and are accessible only via the spruiker which commands superior returns which are often over priced for its worth.
- Complex and opaque property loans to finance the property purchase, often with building contract attached.
- Often are one stop shops that encompass builder, agent, lawyer and mortgage brokers so a commission are often cut or factored into the price.
- The home loan for the new purchase will also be secured against your home or primary residential property.