How to protect yourself from realestate scams

Don't be caught out by 'get rich quick' property hoaxes.

You know the old saying - "when something seems to good to be true...it probably is". Well, it's never been more applicable when it comes to attractive real estate scams.

Most of us strive to improve ourselves (and earn more money) so it is no surprise that personal development is a multi-million dollar industry globally. In Australia, wealth creation is the latest area to be drawing in the big dollars, according to a Brisbane based property investment consultant.

Managing Director of Grow Consulting Group, Ayda Shabanzadeh, said that property is a long term investment and proven performer in any economy, but "get rich quick" courses and seminars offered by wealth creation 'gurus' are giving a bad name to the entire property investment industry.

"The problem is that these courses, which cost anywhere between $1000 and $25,000 for a weekend, are essentially capturing people who aren't ready to invest and don't have a clear idea about what they want or what is right for them."

One size doesn't fit all

Shabanzadeh claims that property investment does not offer a "one size fits all" solution, and many of these seminars are presented by wealthy people who made money through a property strategy that worked for them at the time, or else they made their money through another avenue entirely.

"A lot of these people who are running the seminars bought their investment property in a property cycle trough, and then made their fortune by selling during a property cycle boom. We have an entirely different market at the moment, rendering this particular strategy useless."

Shabanzadeh says that the quickest way to lose money on property is by copying someone else's investment strategy without properly understanding the purpose behind it, or trying to emulate it in a different market or with different circumstances.

A different set of goals

"Just because something has worked for your neighbour or the presented of the course, doesn't mean it will work for you. Everyone is different and has a different situation and different set of goals for the future. You need to take yours into consideration when investing."

According to Shabanzadeh, the primary objective of the people running these workshops is simply to fill a room.

"They are not interested in taking the time to get to know you and your individual situation or goals. They don't even care whether or not you take their advice and invest. As long as they can get you to pay your money and sign up, and then get you hyped on the day or weekend about becoming a millionaire overnight through property," she said.

The new seminar junkies

Shabanzadeh is worried that these types of seminars are creating "seminar junkies", people who spend literally thousands by going to every course on offer, hoping to make their million, and giving the property investment industry a bad reputation in the process.

"For one thing, there is no quick fix or exclusive magic formula to making money through investment property, Effectively, they are the same strategies that have always been used, and will work in the right situation, but only over the long term. It is so much more important to place your trust in a company that will offer you support and guidance throughout the entire strategy"

Shabanzadeh said that the seminars are also a false economy, and people who wanted to become property investors do not need to pay an exuberant amount of money to discover these strategies either.

The warning signs

According to the Australian Competition and Consumer Commission there are numerous warning signs that you can help you determine whether you are being duped, and they include:

• Advertisements for seminars or real estate investment schemes that promise a 'risk-free investment', 'be a millionaire in three years' and 'get-rich-quick'.
• Promises of above-average returns at little or no risk.
• The first seminar you are invited to attend may be free, but there are very high fees to attend any further seminars
• Offers of loans to cover the costs of both the investment and further investment seminars.
• Investment seminars that offer to teach you 'secret' or 'exclusive' techniques for building wealth.

How to avoid it

The ACCC also recommends that consumers follow these simple steps to help protect you from investment seminar and

real estate scams:

• Use your common sense: the offer may be a scam.
• Remember there are no get-rich-quick schemes: the only people who make money are the scammers.
• Do not let anyone pressure you into making decisions about money or investments: always get independent financial advice.
• Remember that family members and friends may try to involve you in a scam without realising that it is a scam: you should seek independent advice (from a lawyer or financial adviser)
• Be wary of investments promising a high return with little or no risk.
• Do not open suspicious or unsolicited emails (spam): delete them.
• NEVER reply to a spam email (even to unsubscribe).
• If it looks too good to be true-it probably is.

For more information on how you can investment seminar and real estate scams, visit the Australian Competition and Consumer Commission.

View full article