Buying a property investment through a real estate professional or an experienced investment strategist can be mind-boggling. Most of the time, you do not know whether the person is trustworthy enough to talk with, has zero interest in the deal, or is capable enough to understand your projected ROI and willing to help you to grow your money.
The fact is, investing in real estate should be more logical and direct, but this is not always the case.
Tons of marketers, investment gurus and those who made money from selling real estate, yet only 99.9% of them want to sell their stock.
Excluding some buyers agencies that do their jobs by serving the buyers’ interest and charging their clients directly, more sellers charge and sell for the vendor. Their main interest is to sell you their stock that suits your budget. Even if they have the most supportive customer support to remind you about future settlements or educate you with wealth tips, their main focus is to increase their sales revenue. It has never been about your money growth.
The whole investment model is a conspiracy.
In fact, the information they provide is mostly based on assumptions and speculations. Nearly 99% of the sellers out there sell their real estate product using the following approaches:
- Direct Selling – Open homes inspections, styling, photoshop for ads, sale presentation brochures and supportive text.
- Non-direct Selling – Wealth inspirations and media-talks that increase sellers credibility and buyers emotions.
On top of that, there are various sales techniques that they use to impact your decision to invest in available stock or listing.
- Tax advantages – that come from negative gearing opportunities, especially with new and off-the-plan properties.
- Government schemes – that create positive cash after incentive portion.
- Awarded-property developers who justified the purchase – Their unique and outstanding projects, above actual research.
- Market outlook – Prepared by statistic and research companies that support the marketing companies product. They provide bias information or information that are not focused on your individual property.
- Bias research comparison – Wrong comparison between capital cities, asset classes, and suburbs with the same water location, resulting in sales redirection. For example, they move sales from the expensive Sydney to the affordable Brisbane, or good size homes in Melbourne West to small houses, townhouses or strata units closer to the CBD at Melbourne or Brisbane.
- Misleading offers to increase equity in the short term with a precise profit figure to all investors – The same profit figure is made on any purchase from the company stock.
- High rental yield properties focus – Base on 4.5 or 5% gross, which is 2.-3% net, especially on strata units.
And the list goes on.
Today, it has become much harder to find trustworthy companies that can advise you where to invest based on figures and accurate data analysis of the specific asset. Most give assumptions or rely on previous data. Some, simply suggest that it would take 20 to 30 years to see some growth. Others, declare that the property market is tough to predict and since in real estate nothing is guaranteed, one should let the waiting game do its magic.
On ASIC pages there are some warnings:
Investment property advisers
Think carefully before using the services of groups of professionals who work together, recommend each other’s services and share commissions, such as property developers, accountants, lawyers and mortgage brokers.
Be particularly wary if they give you property investment advice to invest in a property market you are not familiar with. Do your own research and choose your own service providers that have no stake in the deal.
Property investment seminars
If you are thinking about investing in property, you might decide to attend a workshop that promises to make you a fortune through property investment.
These events often use high-pressure sales tactics to rush you into making big property investment decisions. Protect yourself by spotting the warning signs of a dodgy investment seminar.
I believe and I know I have a substantial equity success record from purchasers that bought credible investment opportunities and not only a beautiful real estate product.
Since there are many factors to project and align with the property risk and returns, these purchasers analysed their asset options thoroughly and not just the state or the capital city where the property is located. They investigate the suburb, the street, the asset class, the property configuration, the layout, the position on the ground, the price, the cost, the price percentile, the supply and demand and the number of new construction opportunities in the next 2 to 5 years that is being added to the pipeline and what percent does it represent from the existing stock, or whether a new strata property is cheaper by at least 50% from any second-hand old house.
All those key factors combination is a science, and is a way to digest all existing data from ABS, Corelogic, ABR and others to produce a genuine report with risk scores that work.
We must know, rather than hope, and we should analyse the data thoroughly and understand the risks and returns rather than investing our hard-earned money on good looking real estate that will perform poorly.
Similar to any investment channel such as shares, bonds, and equity, real estate can go through sound risk strategy analysis to detect the right asset without the need to use any selling tactics to justify the purchase. When equity risk or cash flow risk is low, we know for sure that the asset will still perform in any market condition.
Always be wary of the real estate investment selling conspiracy. Treat any selling transaction with caution and always use independent advice that associate with the property risk to get much better results.
Investinproperties implements risk and returns based approach for years now. If you already work with your strategist or a property professional that you trust, I recommend validating his statements and property risk. This action is the only solution today that can guarantee the significant success of your property and portfolio.