The importance of the right research.
I often read with interest your site about real estate and the consumer. This week, I saw yet another person on “The Today Show” who had paid a huge amount for an overpriced property on “The Gold Coast”. It certainly is “gold” for some unethical people.
As an active real estate investor (and one making a profit) I wonder what can be done to save people from themselves. I am Melbourne based and have purchased a number of properties in Queensland over the past few years that have seen excellent capital growth.
The number one mistake that people make is to compare oranges with apples.
You can’t compare a Queensland property with a Melbourne property, but people think that $180,000 for a one bedroom unit is cheap.
I have paid $70,000 for units over the past year that return $120 per week. One unit is ten years old and people would look at it from Melbourne and say at $130,000 it was still a bargain. Wrong!
Prospective investors should do the research on past sales in the area and be able to make an informed decision. It’s not that difficult.
Investors shouldn’t be disillusioned and stop investing, but they should start learning to avoid short cuts.
I do all of my research myself and nothing can substitute for the legwork involved at looking at up to 30 properties in a couple of days, along with reading local newspapers including real estate and employment to see how an area is going.
I try and promote these work ethics to as many investors that I can, but they all seem to be looking for the easy dollar. I look forward to hearing you speak at the Investor Conference on the Gold Coast next month.
It is not so much a lack of research that catches so many people, but more an excess of deceit and a lack of prosecution of the property deceivers.
You are an experienced real estate investor. You know what to do – and, to you, it seems so simple – just go to an area and check it our for yourself.
However, let’s say you were a school teacher who had never invested in real estate. And let’s say you were approached by a former school teacher who claims to be a property investment expert. Being a trusting soul and having been given a spiel about how the research has already been done for you, you’d probably trust the so-called expert.
And this is how thousands of decent consumers are caught. In the beginning, they simply cannot conceive that someone can wantonly and callously target them. It is not until after they bought – sometimes years later – that they discover how they were conned.
Most of the victims of property scams are trusting people. They deserve the support of those who have not been caught. I see them every day. Their stories break my heart.