In recent years, concerns have been raised over the conduct of certain property promoters, particularly investment advisers or ‘spruikers’. Potential investors need to understand the potential risks involved with buying property through promoters.
A property promoter is a real estate marketer that solicits people to invest in property. As part of their business they may also provide (or arrange for a third party to provide) the finance for the purchase of a property. Many of these products are promoted as investment options for Self-Managed Superannuation Funds (SMSF).
A property spruiker typically sells a property investment system (eg. time-share, rent-to-buy) or is involved in marketing a specific property development. Their activities generally include:
If you are considering buying a rental property through some kind of promoter, conduct your own research and always obtain independent financial and legal advice. Be wary of:
Journalist, Annabel Hennesey went to eight seminars for her investigative report. Watch this short video to here what she found:
The property promotion and property investment advice industry is not currently regulated by either NSW Fair Trading or ASIC. Some protection exists under the Australian Consumer Law (ACL), which prohibits misleading or deceptive conduct, false or misleading representations and unconscionable conduct.
However, you do not want to have to rely on legal action to recover a loss you may have suffered, particularly if you have bought the investment property through your SMSF.
The best protection is to always conduct your own research, and gain independent financial and legal advice from licensed professionals with their own professional indemnity insurance.