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Avoid the property spruikers

Posted 31 Jan '19

Avoid the property spruikers

By Vicky Richards

Property spruiker…..quick, run!

If it sounds too good to be true….. it nearly always is. Get-rich-quick strategies are and always will be, an extremely risky proposition.

Property investment promoters, or spruikers, invite people to their ‘wealth creation’ seminars, often for free, with the promise of investment tips or opportunities. They typically promote a property investment system or market a specific property development and may recommend property investment through SMSFs.

Property spruikers promise easy and quick wealth creation through property investment, often with very little up front or ongoing cost. Unscrupulous operators mislead investors into paying for their advice or investing in property developments that could result in big financial losses.

Remember these spruikers are motivated to gain money at your expense. Too often they are the only ones who actually end up making money from the investment. Don’t risk your money and assets because of their misleading advice.

Be very cautious and hugely sceptical…….and run a mile if the spruiker is:

  • using 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)
  • promoting property deals where the spruiker supplies mortgage broking, legal, conveyancing and tax advice. Groups of advisers who recommend each others' services will not result in impartial advice.
  • suggesting that their scheme or system is ‘government approved’ by frequent reference to the Australian Taxation Office (ATO) or Australian Securities & Investments Commission (ASIC)
  • offering personal loans or credit to help you pay the enrolment fees for training courses
  • promoting property investment strategies that put your current home at risk by using the equity to borrow significant money to invest
  • making claims of capital growth rates that may not be independent or credible
  • side-stepping questions or downplaying the risks and costs involved
  • promoting a particular property development as the spruiker may be receiving a commission or have an undisclosed interest in it
  • promoting properties interstate that you have not seen, or off-the-plan properties that do not yet exist

Consumer protection agencies across Australia have found many property spruikers cannot substantiate the success stories and claims of profits they promote and recommend you don’t attend these seminars. If you do go, do your own research and get independent financial and legal advice from licensed professionals (such as lawyers, accountants, financial advisers and real estate agents) with their own professional indemnity insurance. ASIC’s MoneySmart website has more information on its investment seminars page.

Vicky Richards

Director





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