Beware of property scams
Over the last few years we have seen a significant increase in the number of get rich quick schemes for property investment. Many of these schemes offer to hold your hand along the route to property investment and indeed many of them promise risk-free investment without the need to put down any of your cold hard cash. While there is no doubt that there are legitimate, very helpful and very lucrative property mentor schemes out there, it appears that there are also many property scams.
Sometimes it is easy to get carried away, to imagine a better life with a stronger financial position and if you have family or have perhaps fallen upon hard times this promised-land may seem like a godsend. However, there are some very simple factors you should take into consideration before signing up to any property investment scheme – all of which are very simple but could save you a fortune in the long run!
Where is the risk?
There are a growing number of property scams which promise you a risk-free investment in the property market but if this was the case why are they telling you how to do it as opposed to doing it themselves? If there really was a way to invest in the property sector without any risk and without putting down any of your own cash who in their right mind would give away this money tree?
When looking towards any type of investment the fact is that you need to weigh up the risk/reward ratio and if there is no risk then you really do need to look again. Forget the fancy offices, forget the glossy literature and just focus upon fundamentals, any investment has to carry some degree of risk.
Quote from PropertyForum.com: “If you look around the Internet you will see an array of different ideas, strategies and suggestions with regards to real estate investment and development. Many of these strategies will have you investing significant time, money and effort in eye-catching decor, the latest technology and the latest must have gadgets.”
Have you spoken to other property scheme members?
A quick skim of the Internet today will show you feedback from each and every property scheme, and any other type of association or service provider, across the world. The beauty is that while many companies were able to keep negative feedback away from potential customers in years gone by, the Internet is something of a godsend in this particular area. They may apply to Google to have negative references deleted but the fact remains that for every negative reference deleted more negative references will be added as disgruntled customers become more vocal.
If possible, without the intervention of the company in question, if you’re able to get in contact with previous customers and current scheme members you should be able to obtain some invaluable feedback. It is worth remembering that not all property schemes are scams and there are some very attractive ones out there which offer impressive returns but there needs to be a risk to you. In many ways it is those towards the bottom end of the property scheme/advice market which are impacting the reputation of those towards the top end who offer legitimate commercial services.
Do not sign up before talking to your advisor!
If you believe a property scheme looks good on paper, has the potential to deliver what you are looking for and you have the paperwork in front of you, do not be pressurised into signing up straightaway. It is imperative that you speak to your property and legal advisers to ensure everything is above board and you are not signing away a significant part of your wealth going forward – or perhaps more importantly, exposing yourself to significant risk of financial loss going forward.
The truth is that we have all heard of the get rich quick schemes on TV, they make our heart pump a little faster and they get our mind racing. However, it is imperative that you let the adrenaline die down, take time out and think logically about what you are doing. The reality is that if it looks too good to be true then it probably is too good to be true – leave it alone!