From friends and family, to real estate agents, mortgage brokers and even online forums or webinars, there is no end of information available out there - but it's difficult to know which one is best to turn to.
In fact, I’ve often joking said there are 25 million property experts in Australia.
But be warned… whether you’re a property investor or buying your first or next home, here are 6 sources you shouldn’t rely on for advice.
1. Friends or family
I understand why you’d do this, but the question to ask is: are they financial experts or have they built a substantial property investment portfolio?
While it might be great to have general financial and investment discussions with friends and family, the truth is that unless they are an expert in the field, you should never lean too heavily on their thoughts.
So while it’s great to be supported by the people around us, when it comes to property advice, avoid the ‘risk’ of well meaning but poor advice and speak to an independent property professional instead.
2. Real estate agents or buyer’s agents
Depending on whether you’re buying or selling, a real estate agent or buyer’s agent is an invaluable ally to have on your side.
The thing is, real estate agents work for a vendor to help them achieve the best price so they’re certainly not in the position to advise you if a particular property suits your investment or even home buying needs.
On the other hand, while and experience buyer’s agent is able to seek out properties in their local area of expertise, they’re not qualified to advise whether a particular property suits your long-term investment goals, even though some will suggest they can.
Since your buyer’s agent should be a local area expert, this means they can’t be an expert for the whole city and definitely not for other cities around the country, so in many ways they are just an “order taker” and, as I said, while they are an important part of your property team, they should not be the ones giving strategic property advice.
3. Mortgage brokers, accountants or financial planners
Similarly, while it’s handy to have a savvy mortgage broker, accountant and financial planner on your team, they don’t know the property market well enough, if at all, to offer reliable advice.
While this trio are all qualified in their own area of expertise, they are not qualified to provide advice for the property market.
In fact, financial planners are usually not allowed to give property investment advice under their license.
4. Property marketers
A property marketer sells properties on behalf of a developer and while they may understand property investment metrics, it’s important to remember that they’re not on your side.
That’s because they’re acting with an ulterior motive - they’re working on behalf of a developer and get paid to sell his product.
Property marketers are sometimes referred to as “property spruikers” because they tend to attract large crowds to attend free “property investment” seminars. Of course, today most of these are held online.
And that brings us nicely onto…
5. Investment seminars, workshops or property mentors
Beware of anything which claims to be a property investment seminar or workshop or webinar - similarly for anyone claiming to be a property “mentor.”
During a ‘seminar or workshop’ sales presentation, property marketers will often provide all the reasons why the product that they have to offer is the BEST investment for everyone in the room
And it’s easy to see why that should be a big red flag.
So, ask yourself: is the person conducting the event really an investment expert in their field?
How long have they been financially secure, or do they make their money teaching others?
Similarly, there seems to be an abundance of property mentors around – some who give great guidance, while others are really property sellers or marketers in disguise.
Don’t get me wrong…I believe it’s important to have mentors.
They see your blind spots, give you guidance and support and expand the way you think.
Just be careful who you choose and ensure they have achieved the results you want to achieve.
Now for a disclaimer… for years I conducted property seminars and more recently webinars; but I have never sold properties at the event or after. My team at Metropole give our clients holistic wealth and property advice but have never sold properties so our advice is independant.
Similarly, I have run a mentorship program for over 15 years and mentored over 3,000 successful property investors, business people and entrepreneurs, but again I’ve never sold them a property.
6. Online forums or Facebook groups
This sounds like an obvious one – just going to ask other investors for advice.
I guess that’s why so many people turn to these sorts of groups or forums for advice.
The problem is every participant has their own, often uneducated and unfounded, opinion and unfortunately some of those options are mistaken for fact.
Most participants are enthusiastic amateurs, you won’t find property professionals on these forums unless they’re out there to sell their services or properties.
So, next time you’re looking for advice, don’t hop onto a forum or Facebook group to get your information or you could find yourself in hot water.
Ok great, so who DO I turn to for property advice?
That’s an easy one, you can get everything you need from a qualified property strategist.
An independent property strategist will level the playing field and save you wasted time, money, effort and heartache because they will tailor their recommendations to your personal circumstances and they will warn you of the risks as well as the rewards.
And most importantly, their advice is unbiased towards any property, products or services, meaning they really are offering information you can trust.
How do I identify a trusted property strategist or adviser?
Easy - ask how they’re being paid.
If they are offering free advice, or they are being paid by a third party (such as a developer or property vendor) then their advice clearly isn’t independent.
Put simply…if the advice is free, then you’re the product.
An adviser should also be qualified and a member of a recognised organisation such as the Property Investment Professionals of Australia (PIPA) and be a successful investor themselves.
The strategist or adviser should also have a thorough understanding of not only property, but also finance, economics and Australia’s taxation system as far as it relates to real estate investment
Lastly - and these are big red flags - a trusted adviser should have no properties for sale, should have a number of investment options available depending upon your circumstances, should not make any recommendations at the first meeting or create a “sense of urgency” about any investment decisions or purchases they are advising that you take.
A few last words of warning
Here’s a few things a property advisor can’t do:
- Even a good advisor cannot predict the future. They won’t be able to tell you how the market will perform, what will happen to interest rates, or what capital growth rate a particular property will achieve.
- They won’t be able to find the next hot spot for you, yet many so-called “advisors” suggest they can. In essence, they give their clients what they are requesting, rather than what they need — sound, solid advice.
- Even the most qualified advisor won’t be able to pick the best time to purchase an investment property other than to remind you that the best time to invest was 20 years ago, and the second-best time is today.
- A good advisor won’t be able to help you get rich quickly or achieve extraordinarily high returns without taking on extra risks.
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Michael Yardney is a director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog and hosts the popular Michael Yardney Podcast.
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