Commentary: Terry Ryder – The Home Buyers and Investors Show
There’s no shortage of advice on property investment. What’s in short supply is advice you can trust.
That was the main message for me after three days at the Home Buyer and Property Investor Show in Melbourne last weekend.
It was a good event for Hotspotting, providing the opportunity to inform people about what we do and to speak to audiences on the fundamentals of hotspotting.
But it was a dangerous place for consumers. Real estate attracts so many businesses which see people not as customers to serve but as victims to exploit. Many of them had stands at the home show.
There were organisations with large teams of uniformed operatives prowling the perimeter of their space, ready to pounce on anyone who wandered innocently by.
Some companies, obviously not confident about the quality of their message, employed models with inadequate clothing to entice the unwary.
There were spruikers promising 20% rental returns on the property they were flogging. There were organisations that get paid outrageous fees by developers (and, therefore, are marketers working for vendors) representing themselves as buyers agents or as clubs representing buyers.
One organisation that has been shutting down offices, putting staff out on the street and leaving fee-paying clients without services was there, presenting themselves as a champion of ethics and customer service.
It often surprises me how easily people are ripped off by the spruikers in real estate. Most dodgy operators are exactly what they appear to be: crooks. They reek dishonesty. My antennas start vibrating when I get within 20 metres of them. Within 10 metres, my skin starts crawling.
The spruikers at the home show were easy to pick. The way they dressed, their body language, the way they approached people, the manner in which they expressed themselves and the content of their message were all warning signals for consumers.
Here’s a clue for future reference: if anyone presents themselves as a holder of “secrets” in real estate, run away. Don’t look back. Anyone promising to reveal secrets in the property business is, by definition, a spruiker.
There are no secrets in real estate investment. There’s nobody out there doing anything in real estate investment that hasn’t been done before by others. It’s all available in books, at seminars and on websites.
And here’s one means of protection. Ask people for their credentials before accepting their message. Ask them where they learnt their trade.
One prominent predator at last weekend’s home show learnt all he knows from one of the industry’s most notorious spruikers, who runs what I term the industry’s most vertically-integrated rip-off – charging a huge fee for their advice, before recommending that clients buy product developed by the spruiker, get their finance from a related company and then pay maintenance and management fees from another related business.
There were, of course, plenty of reputable businesses at the Melbourne Home Show, including financiers, mortgage brokers, development companies, financial advisers and media organisations.
The problem for consumers was sorting the good from the bad and the downright ugly.