Investment scammers con Australians daily. In fact, last year alone over $38.4 million in financial losses was reported as a result of people falling victim to dodgy investment schemes.
Thousands are scammed by dodgy “get-rich-quick” schemes yearly. Often investing a significant amount of money that they never see again. The internet has made it extremely easy for property criminals to pose as Property or Real Estate experts. It’s now more important than ever to do your due diligence before proceeding with any investment opportunities, especially if it seems too good to be true.
The rental yield is advertised too high
Rental yield is a common indicator used to assess a property’s investment potential. It is calculated by the yearly rent/ the purchase price x 100. Often scammers use a fake rental yield to dupe investors into believing the property will generate significantly higher revenue. As a general rule, be wary of any rental yield that is over 8%.
Being ‘free of charge’
All investments have an element of risk. Any scheme that promotes receiving a return from zero charges is definitely suspicious. It’s also important to remember that professionals make a living from their expertise. Therefore anyone offering their skills or services for free is likely not as credible as they appear. If a professional does persist that their service is free. Don’t be afraid to request disclosure.
Investment schemes based overseas
International schemes can be quite risky. Often times the investor doesn’t have any knowledge of that landscape. Before committing to an overseas investment scheme.. It’s crucial to research and familiarise yourself with the specific market! This will ensure the information you have been given is credible.
No matter how legitimate an investment scheme may seem, checking that it’s registered with ASIC is essential. Unfortunately, many situations for investors losing money to fake initiatives could have been avoided simply by verifying its registration.
A property more than 15% cheaper than the market rate
Scammers may provide fake market quotes, making properties seem significantly cheaper than they actually are. They do this not only to increase the appeal of the property.. But also so they can make it seem like they are offering a significant discount. Be cautious of any schemes that are selling more than 15% cheaper than the market rate.
Although technology is making investment scams more common, it is also making it easier to determine the scheme’s legitimacy. When it comes to investing money into an industry or scheme.. Always do your research. Remember that if something seems too good to be true, it probably is.