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How to Avoid Property Marketing Tricks

No matter what kind of property you're trying to buy, there are always people out there who are looking to cheat the system or who want to scam unsuspecting investors. With property investment, developers of Off the Plan (OTP) apartments have been known in the past to try and use different shady tactics to get rid of an undesirable apartment and pawn it off on the first person they meet. Don't become one of the people who have been tricked, and as with any other business, the goal is simple: don’t get tricked, especially by savvy marketers who know all the ways to twist a situation to get a desired result. This is a two part guide designed to help you to navigate your off the plan property purchase! With the right knowledge, you’ll be able to arm yourself against any type of sly tactic a designer throws at you. Here are some great strategies for avoiding property-marketing scams.

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Look past the displays

The developer’s goal to get the property into your hands by almost any means necessary. They will design glossy brochures that depict people sitting on stylish furniture and enjoying the room. When you come to visit and view the property, they will dress it up by bringing in fancy furniture and window dressings to entice you to imagine the demand once tenants see the property.

Ignore all of it. When you’re looking at a potential property, keep three things in mind:

  • The current value of the property
  • A solid analysis of its potential growth
  • What the layout offers (number of beds and bathrooms, etc.)

Developers want you to be distracted by the property’s projected image. You might imagine yourself living there, which will distract you from what you’re really going to be using it for: your tenants. Don’t let yourself get caught up.

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What negative gearing really means

Though investment properties are often seen as one of the safer investment options, you can still lose your shirt with a bad investment. Remember that the more you borrow, the more you could potentially lose. Your risk skyrockets, and if you’re not careful, you could end up in a mess that will take you years to recover from.

Negative gearing has become popular among investors, despite its risky tendency, yet developers will sell OTP apartments using it. In other words, this plan allows you purchase a property knowing that the rent will not cover the yearly expenses. For example, you put $50,000 up for a $250,000 apartment and get a loan for the remaining balance. The interest each year is seven percent, which translates to about $14,000 a year.
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The rent however, is only worth $250 per week ($12,000 p.a.) and isn't enough to cover the interest.

So why opt for this plan? You can actually claim a large tax credit when it comes time to pay your dues, but you will still be at a loss, which might cause a strain on your lifestyle. Most of the time, negative gearing benefits the most when it comes time to sell the property, but if you’re not looking to sell any time soon, you might be in for a serious downsize in your lifestyle. Instead, treat this as a possible benefit. You want a steady investment that won’t keep you awake at night.

Take these tips on board, and keep reading for more property investment and property buyer tips in the next part of this two part guide for buying property. Also, if you're looking for a home loan, you'll find great home loan rates from Newcastle Permanent which won't contain any scam or worry! At least you don't have to be totally aware of everything in the property investment world, and some people are just out to do good…

A post by charliebtallent (163 Posts)

charliebtallent is author at LeraBlog. The author's views are entirely his/her own and may not reflect the views and opinions of LeraBlog staff.

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