5 red flags to beware of when investing in property

By Grace Ormsby 29 April 2022 | 1 minute read

A property investment expert has dished out some advice on the red flags new investors should be steering well clear of.

red flags

The chief executive of Buy Australian Property, David Pascoe, has warned that there are plenty of ways investors can run into trouble when building out their portfolio.  

According to him, many investors do run into trouble for a myriad of reasons, including because they haven’t done their homework – or enough research.

In addition, he warns against making quick or uninformed decisions or buying a property simply because it is close to their own, and even taking advice from “people and companies that don’t know what they are talking about”.

Below are five of the biggest red flags that first-time investors should be looking out for when they begin their property journey.

  1. One-stop shops

“Watch out for the one-stop shops that do everything for you,” Mr Pascoe cautioned.

“There is a reason they want to keep it all in-house and not let you use independent outside people.”

  1. Rent guarantees

Mr Pascoe also advises against buying an investment property based on a rent guarantee.

“A good quality property doesn’t need a guarantee, it will rent on its merits,” he shared.

  1. A sales focus

Just like no one should be selling you a rent guarantee, Mr Pascoe warns against working with people who are just focused on the deal.

“Watch out for people trying to sell you a property – you should be dealing with a company that is service and process-focused – not sales focused,” he stated.

  1. Incorrect data

Data can be a land mine. Mr Pascoe urges investors to “watch out for incorrect data from companies that do their own research”.

Instead, he touts the benefits of businesses using independent companies “for the real data and facts”.

  1. Getting rich quick

The CEO offered a word of warning to investors against “anyone who tells you that property is easy to get rich from”.

Similarly, steer clear of “anyone that tells you he will make you a millionaire”.

Mr Pascoe has previously imparted advice on the nine questions property investors should be asking every time they buy an investment property.

He also provided insight into the nine factors that together will create a good investment strategy: time frames, goals, income objective, purpose, vision, expectations, opportunities, exit strategies and options, as well as the obtaining of expert advice from the right people.  

About the author

Grace Ormsby

Grace Ormsby

Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and... Read more

5 red flags to beware of when investing in property
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