Buying a property from Spruikers

Would you buy a property from property spruikers, the answer is NO. Its a question we get asked a lot. If you get a phone call from a property investment company more than likely ,we would advise that you listen to what they have to say, but don't go with them. Our reason for saying "NO" is that most likely they come out ahead and you loose and you wont know your mistake until 8 to 10 years later. You'll blame your self but have forgotten the advise you were given back then. The advise they give is actually quite sound but its the application that concerns us. They will advise you about NRAS, negative gearing and the new catch phrase "positive gearing". The problem I have is they will try and sell you a property that they have a option on with a developer that is normally discounted to them or they sell you a property at inflated price. The normal margin for a property spruiker is about $20,000 per sale, so that's a lot a margin that you have to make up before your property starts to get ahead. There doesn't seem to be a lot of research into property selection as they are only interested in selling their property.
Most of the time there is no PDS (Product Disclosure Statement) so you wont really no what is happening. One thing that really concerns us is they will target people who can least afford extra risk exposure. The lending criteria is for some one with %30 equity but once you have bought the invest property you will have a risk from 70% to 170 % on you equity. A lot of spruikers will try and push property in low value areas because that is the cheapest area to buy into, its cheap for a reason. Normally these properties have low growth. In saying all this some property advisers do offer good advise its just a matter of finding one..

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