The property industry is littered with consultants, advisors, researchers and self-professed ‘property experts’ who all sprout what and where the next best property deal can be found. The two consistent threads that can be heard being promoted are growth and return, namely ‘Capital Growth’ and ‘Rental Return’. Recently I have read several articles from a well-known publication and quite frankly I don’t know what is worse, the spelling and grammatical errors in the articles or the information bordering advice that is written, with quotes coming from individuals calling themselves buyer’s agents.
For the record, there are many buyer’s agents and advocates that have many years of experience, offer excellent service and uphold the highest of standards. These are the companies that offer prudent advice to minimise risk to their clients exposure in the property market. There are also too many buyer’s agents to count that do not operate in this way, in fact far from it, and that is the real issue. They make outlandish statements about buying in mining towns with a history of boom and bust markets. They recommend that “now is the time to consider investing in the Brisbane inner city unit market for $300,000” despite the market widely considered to be in the biggest slump in history due to a chronic oversupply of those very units.
My biggest concern is that potential investors are only, what I call, ‘listening to the noise’ rather than ‘looking for the signs’. This means that they are being lured by the potential of capital growth and higher rental returns before fully considering and researching the risks. The issue in the real estate industry is that anyone can act on behalf of a third party and purchase them a property so long as they hold a real estate license, they require no other formal property education or training. To use the title of a Hollywood movie, the ‘Clear and Present Danger’ here is that we are facilitating many investors receiving poor advice through poorly educated advisors. If this sounds familiar it is, because that is exactly what is coming to light now in the Royal Commission into the banking industry.
If you would like to talk with us about what properties not to buy please do not hesitate to contact us!