G'Day Carolynn
A customer of mine contacted me in March, 2007 wanting to increase his existing loan to provide equity release / funds to complete a purchase in Eaglehawk, Bendigo
He had been telephone canvassed by a marketing company about six months earlier and had bought a property off the plan for $226,000 with an estimated market rent of $210 per week.
The marketing company had also 'arranged' finance with a reputable lender but he needed the equity release and the finance company wasn't accredited with his existing lender.
Looking at my records today and doing a quick search on realestate.com.au, the house next door is now for sale, brand new, for $220 - $240,000. Rents in the area are currently about $230 per week.
The property settled in June, 2007.
Since then, there has been a general slide in property values particularly in regional areas which was certainly not the fault of the property developer.
The property is probably worth what my customer paid for it and rents have increased by about 10% in that time.
Was he stupid or foolish to buy through a company which cold called him?
No, I don't think so. Could he have bought better if he had done his own research? Maybe, maybe not.
Would he have done it at all if they hadn't called him? Probably not.
So is he better off to have bought this property? Yes, I would think so. At least he has taken some action for his own future. It galvanised him into action, and nothing happens unless somebody sells something. He sold himself on the idea of buying the investment and by the look of the neighbouring property for sale, he has done as well as can be expected given the circumstances of the market over the past eighteen months.
Marketing companies serve the purpose of getting the message out there. This does not make them all vagabonds and thieves.
Can we more experienced investors do as well or better than an opportunity brought to our attention by a marketing company? Well, we would all like to think that we can, and perhaps we can, but sometimes they know of something which we wouldn't have known about if they hadn't told us.
Carolynn, I would be inclined to do a bit more of my own research before getting on the plane. If, after a bit of poking around, you reckon that what is being offered is the real deal, then go and see it. But have a look around your own backyard, first. The diamonds can be obscured by familiarity, but they are there, and perhaps people are flying to your neighbourhood today to look at a great opportunity in the next street from you.
You have taken a giant step in talking to someone and it has started you off. Keep going and before you know it, you will have the opportunity you have been looking for
Cheers
Kristine