Avoid Property Scams

Sarah Comans and her husband Jason bought their first investment property through an agent recommended at a free seminar they attended last year.

They were left with an overpriced, dud property and an agent who appeared to have vanished into thin air.

The real estate agent, who was recommended to the couple at the seminar, had promised a rental income of $450 a week.

The Queensland property is still falling short of its "guaranteed" rental income by $80 every week.

"He said that he would put it writing for us, however every time we asked him to do so he put it off, saying he would give it to us at settlement," Sarah Comans says.

"We stupidly went ahead and signed the contract, and kept asking for the written guarantee, which never came.

"After we signed the contract he stopped returning any calls or responding to any emails from us."

The Comans story is a common one, says consumer advocate and author Neil Jenman.

"Thousands of people are ripped off after attending free seminars," says Jenman, a former real estate agent who has now styled himself as an outspoken critic of property scams.

The Real Estate Institute of Australia (REIA) has no figures on the number of people who get ripped off by seminars like the one the Comans attended.

But REIA president David Airey says there are "a lot" of unreputable free courses on offer.

"There is a lot of courses on how to make money out of property...we never endorse any of those courses," he says.

Stuart Wemyss, author of The Property Puzzle, also advises caution.

If people are going to attend free property seminars they should go with "an open mind and a closed wallet", he says.

"If you see anything that is a free seminar the first question you need to ask yourself is how are these people making their money (because) no one gives away valuable information for free," he says.

Airey says the property investment seminar industry is unregulated, which means any scam artist can hold one.

"You can go out and put a sign out tomorrow and hire a hotel suite and tell everybody that you're a property expert," he says.

"We advise people to check out the credentials of people who are spruiking property.

"Do they have an office or a phone booth? Do they have a home that they live in or do they have a P.O box address? There are just so many easy ways to check out these people."

Wemyss says the most important thing for a prospective investor to do is seek independent property assessment and financial advice.

And they should ask themselves two key questions: is it too good to be true and how is this person getting paid?

The Comans are currently renting out their property but are only able to get $370 a week for it.

Sarah Comans says they were "straight out lied to".

"He had told us that the property would be positively geared and this is not the case. He straight out lied to our faces to get the sale," she says.

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