Home News How to avoid being scammed in property investing

How to avoid being scammed in property investing

Font size :
Nila Sweeney
Whether it’s a neighbour, a relative, a friend or a work colleague, we all know someone who has been burnt by a property scam. What can you do to protect yourself?
 
We’ve all heard horror stories about intelligent, every day Australians who have somehow been sucked into a real estate scam that stripped them of every last penny.
 
“It’ll never happen to me,” we think optimistically. But the truth is, it can be difficult to distinguish the persuasive conmen from the qualified experts in the real estate industry – and even the most experienced investor can become a victim.
 
“Almost every day there is a story in the press or on the news about the property market, and our email inboxes are flooded with newsletters offering positively geared properties, never-to-be-repeated investment opportunities and gratuitous advice from experts who offer to take on a journey to wealth from property,” explains property researcher John Lindeman, author of Mastering the Australian Housing Market.  
 
That’s why it’s important to be able to “recognise the doom and gloom merchants and the boom-time spruikers”, he says.
 
But precisely how do you do this?
 
“In property transactions, thousands of people – especially novice investors – make a simple and deadly mistake. They fail to do two simple things that could have saved them being ripped off,” explains property expert and consumer advocate, Neil Jenman.
 
“This is because they are eager to buy, because they believe, often rightly, that property is a good investment – but they are daunted by the buying process. To a novice, everything seems complicated. And so, when someone comes along and offers to ‘take care of everything’ the novices feel a huge sense of relief.”
 
Jenman’s first golden rule is easy: obtain an independent valuation.
 
“Get an independent valuation from a valuer who is not connected to the company selling the property,” he says.
 
“It astounds me that people who are spending hundreds of thousands of dollars can make the terrible mistake of not spending a few hundred dollars, getting what amounts to a veritable safety check of the property.”
 
A qualified valuer will be able to provide you with a valuation for less than $500. Not only will the valuation give you peace of mind, but if the property purchase is an investment, the expense is tax deductible.
 
Jenman’s second piece of advice is to seek the advice of an independent lawyer who also has no connection to the company selling the property.
 
“The good news is this,” he adds. “I have never seen anybody ripped off in a real estate investment if they have followed what I believe are these two golden rules.”

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

House prices return to more affordable levels in mining towns House prices return to more affordable levels in mining towns

While the end of the mining boom caused property prices to collapse, on the plus side, homes are more affordable again Read more

Borrowers should anticipate a possible rate hike Borrowers should anticipate a possible rate hike Some experts advise borrowers to look for a fixed loan that allows extra repayments so that they can whittle down the balance sooner ... Read more

Why choosing the right mortgage is hard for first-home buyers Why choosing the right mortgage is hard for first-home buyers Many feel overwhelmed by the sheer range of products and interest rates on offer, a new survey reveals ... Read more

Mortgage applications drop in second quarter Mortgage applications drop in second quarter This marks the “beginning” of a downward trend, says Equifax executive ... Read more

More mortgage news and articles

Sponsored Links

Wednesday, Jul 26, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords