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Beware one-stop shops

I recently went to a property investment evening and from what I saw, there is a right way and a wrong way to buy an investment property. What do you think about these groups, which offer an education program and help you into properties and even arrange the finance?

I am a great fan of property investment but it has to be done the right way.

I am always worried about businesses that offer to do everything from education to property provision and supplying the finance.

You see, a few years back a guy called Henry Kaye got into a bit of trouble with ASIC for practices that they thought disadvantaged his customers.

I think education you pay for is AOK, but make sure you are not paying the earth!

There are great books and even property agents that help people into property, but even in these cases be totally aware of what you are paying and what you get.

When one business provides a one-stop shop, you could miss out on the benefits of checking out better deals for finance as well as better properties to buy.

I always like investment properties where the area in question is really popular for tenants.

It should also be an area where history says there has been nice capital gain.

On the other hand, you could be in the market for a positively geared property where there isn’t much capital gain but the fact that the rent received is greater than the interest and other costs can make it a great deal.

Go to these education evenings but never rush into signing up for costly programs.

Ask some wise people to look at what you are considering and be open to making objective decisions.

These property educators can sometimes be spruikers who are great at selling stuff, so be on your guard that you don’t get conned.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Wednesday, February 17, 2010

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