Ask Paul: I fell for an investment scam once and can't afford to get it wrong again

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Hi Paul,

We met back in 2000 when I was taken for a ride by a Queensland investment company.

It's taken a while to regain courage, but it's time to try again.

ask paul property investment scam property investment deal

How can I decide between what's good and bad, safe or dodgy when deciding how to proceed with property investment?

I've met with two different property investment companies. Both promise the world and sound great, but I have no idea how to tell if they are all they say they are.

And I can't afford to get it wrong. - Tammy

Oh, come on Tammy, let's not do this again!

I remember meeting and filming with you and I very clearly remember hearing radio ads offering "free flights to Queensland" in the 1990s to buy an investment property for "under $20 a week".

So, after a bit of research, my producer, film crew and I spent some time on the Gold Coast checking out what had to be a scam. And, of course, it was.

As we showed on the Money TV show, you did get to own a property, but back then, as we demonstrated very clearly, people were paying close to double the value of the property due to high-pressure sales tactics.

I am more than happy for you to buy a property, but do you have to go with a scheme promoter "promising you the world"?

Why not just do your own research in a market that you know and buy something that is already built on the normal resale market?

Properties are always coming up for sale due to people upgrading, divorcing, dying and changing locations.

In my view, buying existing property is a far more logical process. You can inspect it, get a building report, check it out against similar properties and buy with more confidence.

Quite often older properties are better located, on more land and can be of much better build quality.

So, my view, Tammy, is to do your research on existing properties, not on companies that may well promise you the world but deliver you an atlas!

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Click here to email Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.