Updated: 3 days ago
By Grant Foley, Buyers’ Agent & Director, Grant Foley Property I’m sure you’ve heard the saying, “There’s no such thing as a free lunch”. The phrase was invented more than 50 years ago and is commonly accepted to mean it is not possible to get something for nothing. Unfortunately, the promise of untold riches without little effort or financial input still seems to be the go-to marketing ploy for unscrupulous operators across a variety of industries. Alas, in the property investment sector, there are probably more spruikers than most. One of the possible reasons is the ability for some to target people’s emotions relatively easily because of our innate desire to be property owners or landlords. The other reason is the lack of specific legislation around the provision of property investment advice, which is a situation that the industry has been trying to remedy for a number of years already. There have been a few attempts to stamp out spruikers from the marketplace over the decades, but just like markets rise and fall so, too, do these charlatans whose only motivation is to make money at the expense of others. Often, they promote “strategies” that will supposedly make people property millionaires or help them pay off their home loans quickly by buying a new house and land in an outlying suburb or an off-the-plan unit in an oversupplied inner-city area. The reason why they are “recommending” these dwellings in these locations is usually because they are actually working for the developer and will receive a hefty commission from each sale. Now, I’m not saying that buying new property is always a bad idea. However, every investment property should be strategically selected, including determining the very best location for that particular dwelling type. The lack of legislation surrounding property investment advice is why so many novice investors can get caught out by this trap. They don’t understand that the “advice” they are receiving is biased, plus there is no legal requirement for the spruiker to disclose how they are being paid. The Property Investment Professionals of Australia (PIPA) is the industry body for professional operators in the sector with the aim of creating legislation or at least minimum educational standards. PIPA members, such as myself, must commit to a code of conduct as well as the disclosure of any commissions that are being paid. However, PIPA members are generally only paid by their buyers’ agency clients so they can provide honest and transparent investment advice. We create tailored investment advice for every one of clients which takes into consideration their individual financial circumstances as well as a multitude of other unique factors. Qualified Property Investment Advisers (QPIA) like myself are also the only professionals in the industry who have the qualification and education to provide property investment strategic advice to their clients. Fundamentally, that means we are not order-takers. This means that if a client comes to us with a property or a location that they are keen to invest in that we know will underperform or, worse still, be financially catastrophic for them, we will advise them of that. It is only after completing a detailed analysis of their circumstances and their financial goals that we provide tailored advice on the locations and the dwellings that would be the best fit for them individually. While the industry continues to strive for the creation of laws or minimal educational standards, the best consumer protection out there is to look for an adviser that is a member of PIPA and is a QPIA. Otherwise that “free” lunch or seminar could turn out to be very costly indeed.
Grant Foley is a Property Investor, Qualified Property Investment Advisor® & Licenced Buyers Agent. Enquiries: firstname.lastname@example.org
© Grant Foley Property 2021
The content of this article is of a general nature. Investors should seek their own independent legal & financial advice