http://www.news.com.au/business/story/0,10166,21227424-462,00.html?from=public_rss
http://www.theaustralian.news.com.au/story/0,20867,21223306-25658,00.html
I'm not specifically commenting on this group since I know nothing about, but just wanted to discuss the question 'if the investment is so good, why isn't the promoter buying it?'
You can extend this to any agent, lawyer, etc who advises you on property.
The answer includes: the introducer (I use the term very loosely with none of the legal implications):
1) Does not have the means to do the deal
2) Doesn't want to take the risk, preferring to take a known fee instead of a more risky, but potentially higher, future return (as those of us who have held property for the last few years can attest)
Just because someone is good at something doesn't mean they will do it themselves. Some traders might be brilliant at making money for their firm but are idiots when it comes to their own investments. Knowledgeable property agents may not have IPs, perhaps because they fear debt.
In the example outlined by the articles, there IS risk, even though it may not be mentioned. If interest rates rise, or there is a recession, then prices WILL fall further in Sydney's West. And buying in the cheapest areas MAY be an issue in terms of finding good tenants. All these are things to think about when considering the investment and analysing it against the price you pay and the value you get.
It also doesn't mean you will lose money if you hold for the long term. You can protect yourself by putting in undrawn LOCs (if you create extra equity with the renos), fixing your interest rate, etc. Neither the risk nor the ways to lesses those risks are discussed in the articles.
There is ALWAYS risk in investing. Risks are actually the highest when people start thinking there is no risk. 'Why doesn't the promoter buy it himself?' isn't necessarily a show-stopper, it just means it's NOT a riskless investment and you have to do your homework.
There ARE cons out there who want to sell you inflated investments. However, it doesn't necessarily follow that ALL such marketing companies, agents, etc are cons.
Something to consider for those who worry about 'what if I buy a crap property' and aren't pulling the trigger.
Alex
http://www.theaustralian.news.com.au/story/0,20867,21223306-25658,00.html
I'm not specifically commenting on this group since I know nothing about, but just wanted to discuss the question 'if the investment is so good, why isn't the promoter buying it?'
You can extend this to any agent, lawyer, etc who advises you on property.
The answer includes: the introducer (I use the term very loosely with none of the legal implications):
1) Does not have the means to do the deal
2) Doesn't want to take the risk, preferring to take a known fee instead of a more risky, but potentially higher, future return (as those of us who have held property for the last few years can attest)
Just because someone is good at something doesn't mean they will do it themselves. Some traders might be brilliant at making money for their firm but are idiots when it comes to their own investments. Knowledgeable property agents may not have IPs, perhaps because they fear debt.
In the example outlined by the articles, there IS risk, even though it may not be mentioned. If interest rates rise, or there is a recession, then prices WILL fall further in Sydney's West. And buying in the cheapest areas MAY be an issue in terms of finding good tenants. All these are things to think about when considering the investment and analysing it against the price you pay and the value you get.
It also doesn't mean you will lose money if you hold for the long term. You can protect yourself by putting in undrawn LOCs (if you create extra equity with the renos), fixing your interest rate, etc. Neither the risk nor the ways to lesses those risks are discussed in the articles.
There is ALWAYS risk in investing. Risks are actually the highest when people start thinking there is no risk. 'Why doesn't the promoter buy it himself?' isn't necessarily a show-stopper, it just means it's NOT a riskless investment and you have to do your homework.
There ARE cons out there who want to sell you inflated investments. However, it doesn't necessarily follow that ALL such marketing companies, agents, etc are cons.
Something to consider for those who worry about 'what if I buy a crap property' and aren't pulling the trigger.
Alex
