Call us on 1300 794 893

Your Money

Too good to be true?

Could you please help? I’m looking at investing in the Bundaberg area in Queensland, through a company called XYZ (name changed for legal purposes). The only trouble is that I can’t find out any info on XYZ, have you heard of them? And if so could you please let me know what you think?

They say that they take all the hassle out of investing in new rental properties, everything from organising the finance to getting the house built. They seem to be on the level but if you could just have a wee look at them and give me some advice I would be forever in your debt.

I have no way of proving whether this group is good or bad but I can show you how to test it our for yourself. I found out about the company on its website. The site has been created by people who know how to sell and that’s no crime. In fact, as a small business expert, they have created reasons for a customer to look at them but we must go deeper than that for personal investment purposes. Let’s look at what they are selling and saying and I will give my objective comments.

The website claims that property investing is safe and a good way to build wealth.  Many Australians trust it but it doesn’t mean it is a mistake-free way of investing. People do lose money on properties if they are not bought the right way.

They also say nine out of 10 people in this country retire on an income less than median wage as many people don’t plan for retirement. They are pretty well right here.

They seem to be offering advice on how to buy rental properties with expertise but you have to test them out. They say they are completely independent. They are not developers and they do not sell properties. You have to test them out here. If they educate you but don’t show you properties to buy that they could be connected to or getting commissions off, then that’s a good first step. They say they help you purchase the best investment properties located in high growth locations through some of Australia’s top developers. Ask them if they receive any commissions from these developers.

They say they guide you through the process and show you how astute property investors can create and hold onto wealth. This could be good if they educate you properly. They also say they do all the work, so that you can relax and get on with your life, knowing your money is working hard for you.

So far, OK, but this line worries me. They claim that there’s no fee charged by them because they want to help you minimise out-of-pocket expenses.

How do they get paid? If they were educating you and doing the legals and other activities and then charging you say $3000 or even $5000, I would be less concerned because the service sounds like what a lot of people need.

However, when something sounds too good to be true, it often is too good to be true. Find out how they get paid and how much they get paid before you play ball with these people.

Finally, don’t look for a hassle-free investment. Instead, promise yourself that you will become an amateur expert on property investing. There are buyer’s agents out there who could do a lot of these promised services and will charge a flat fee so you know what you are up for.

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, July 14, 2010

blog comments powered by Disqus
Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300