Final checks to avoid being a victim of property frauds
Even investment property experts can get caught out by companies committing property fraud. However, not all property investment scams are easy to see through. There are some very professional scam artists out there, making money through property fraud on an unprecedented scale. They don’t see it as a crime; they see it as work.
In this post, I’m going to discuss three pieces of property investment research you must do before you sign on the dotted line. This is an extra layer of protection that will help you avoid the scam artists and make profitable investments in property. I’m also going to give you a bonus tip, which will protect you from the latest email scam doing the rounds.
Check out the people you’re dealing with
You may have started to deal with a company that looks legitimate, but do you know? If you’ve followed the investment research strategy, we suggest in our property investment research post on Property investment scams. Then you should have a high level of confidence that it is what it says.
But what about the investment property experts who are dealing on your behalf? They may have a LinkedIn profile that says they are trustworthy and have a great reputation, but how do you know?
This is why we always like our clients to come into our offices and meet us. Not only will you get to meet the manager working for you, but you’ll also get to meet the team, too. If you’re dealing with an investment company that only ever wants to meet you on site or in a neutral location, be extra wary. Especially if all you ever receive is a four-page sales brochure and a business card with no more than a mobile number as a contact.
Question everything
Don’t accept everything the agent tells you the first time. Question everything, make notes, and question again. Part of the due diligence process we recommend for property investment research is the 89-point due diligence checklist – a way to ensure that you ask the right questions about every aspect of your investment property.
Professional scammers are good at getting their story straight – but ask enough questions, and they’ll slip up eventually.
Take your time
You’re about to invest perhaps hundreds of thousands. You’ll probably borrow to do so. There is no need to rush to sign. Visit the development site. Walk around the local area. Take extra care on your due diligence. Use investment guides to figure out your cash flow, and allow for contingencies.
Only when you’re happy should you sign on the bottom line. A property investment company with plenty of experience will understand that this is a big decision for you. You will not be rushed unnecessarily.
Get your solicitor to check all the details
`So you’ve spoken at length to the property investment company, met with the reps, and visited the development. You’ve done your research and due diligence, and checked everything twice. Then you checked it all again. But do you understand the legal documents?
Now is the time to get your solicitor involved. Tell them what you think the deal is, and let them go through the paperwork with a fine-tooth comb. The expense will be worth it.
If it just doesn’t feel right, maybe it isn’t
Finally, trust your instinct. If you don’t feel comfortable with the investment opportunity, then it’s better to miss this one and move on to the next. There’s always a better deal next time.
For more information about Gladfish and our current properties, the developers we work with, and our comprehensive research and property investment guides, feel free to call me or one of the team here at Gladfish on +44 (0)207 812 1255.
Cheers,
David Lines
