I’m well into my second decade as a property professional. As both an investor and developer myself I talk to property investors every day. One of the things I’ve observed over the years, which I know can frustrate clients no end when trying to select the right property, is the difficulty of comparing apples to apples.
Unfortunately, sometimes developers, builders and agents can engage in some misleading advertising which can confuse clients and leave them uncertain about what they are really getting for their money. This can often be deliberately designed to prevent someone from making a side by side comparison of two different offers so they can work which one is most suitable for them.
“Bare bones” pricing is one way it is done. This is where a property is shown as being “available from $XXX,000”, which might be true, but that price might not include some of the most basic features actually required by anyone wanting to reside there… things like siteworks, foundations and floorcoverings, to name a few! That’s a little bit like saying, here’s this new car for sale and its only $10,000. Oh you wanted an engine with that? Well if you want the works, like the engine and the gearbox and the seats, that will cost you another $9,990!
“The only one” is another strategy sometimes employed to suggest that somehow this particular property is rare and the “only one of its kind”. This strategy is meant to make the potential buyer feel like they are getting something very special and they should not delay or they will miss out. Of course once the person signs up to that property, the salesman then tries exactly the same line on the next customer, selling them an identical property under the guise of it being “the only one of its kind.”
Another version of the “bare bones” approach, is the “lowest price” version of the property being offered for sale. This might be a fully complete package but it’s not the one being pictured in the ad and it’s not the most likely one that everyone wants to buy. It’s the “cheapest” version available and it’s the price of this one which is shouted from the rooftops and put in big bold type to make people believe they can get the property they want for that low, low price.
(Should we even mention incentives such as buy a property, get a free car!?)
Here at Investors Direct a lot of work goes into selecting the properties that we choose to recommend to our clients. We go through an exhaustive process of analysing the yields, potential capital growth, proximity to services, etc. We even rate the site, the developer, the builder, etc.
The properties we show to our clients are presented honestly and accurately, with everything you get clearly spelt out. It can get very confusing and frustrating for investors when they “think” they have seen the same thing “advertised on the Internet” for several thousand dollars less, only to discover when they read the fine print that what they are relly getting is nowhere near what they thought they were getting.
And that can lead to a very poor investment outcome.
To find out more about our Property Advisory department and how we can help you choose the right investment property for your needs, please feel free to contact me anytime directly via email on firstname.lastname@example.org or call 1300 663 836