Consumers Warned About Dodgy Property Investments
NSW Fair Trading is urging buyers to be wary of property investment schemes that are allegedly promising big returns with low risks.
Selected companies in Australia are rapidly being labelled ‘dodgy’, using ‘obligation free’ seminars to persuade consumers to sign up to high risk investments directly on the spot.
These operators, often referred to as ‘property spruikers’, are accepting reasonably large commissions from developers while the consumer deal that will likely loose them money.
NSW Fair Trading representative’s have explained that the consumer protections agency continues to receive complaints from those affected.
“Consumers are advised to take the time to obtain independent financial and legal advice before signing anything to help ensure that they are getting a good deal,” Representative Rod Stowe said.
NSW consumers are warned to be wary of any scheme offering the following:
- The ‘spruikers’ supplying mortgage broking, conveyancing or tax advice as part of the property deal;
- The suggestion that the scheme is ‘government approved’ by frequent reference to the Australian Taxation Office or Australian Securities & Investments Commission;
- Offering personal loans or credit;
- Property investment strategies using current equity to borrow significant money;
- Claims of a capital growth rate that may not be independent or credible;
- Spruikers who side-step questions or downplay the risks and costs involved;
- The promotion of a particular property development, as the operator may be receiving a commission or have an undisclosed interest in it; or
- Buying properties interstate that you have not seen or off-the-plan properties that do not yet exist.
