Whenever large amounts of cash are at stake the unfortunate reality is there are people that will look to take advantage, and even cheat there way to do somebody else wrong. Property investment is no different. In our combined decades of experience, we have worked through a lot of due diligence and as such have come across certain opportunities that have rang alarm bells for us. A scam could be a complete con on something that the seller had no intention of delivering or may be an opportunity which doesn’t deliver close to what was promised and had deliberately been over sold to an investor. Firstly, when you’re buying a property you may need to do the due-diligence on a number of entities/companies as it may be the case that an agent is selling you something in good faith but they are the ones being conned.

1. To good to be true

  Your gut feeling isn’t to be underestimated. If an investment opportunity is promising a lot, then maybe it is too good to be true.  Trust your instinct and make sure you follow through with the following steps if you get this feeling.  

2. Look up on Companies  house

  Companies house is the first place to see if the all the companies that are selling you something are real, so check the developer and the agent. If you cannot find them, then this is a major alarm bell that they may just be a complete scam.

3. Look up social media

  Many companies may not have any social media presence. However, personally I like to see the inner working and daily activity of a company as it adds that level of authentication. For myself I like to see constant updates on products, a small community of social media follows, a long history of posting and its nice when you see photos of team members. All this may be difficult for a scam to produce and just fills us with confidence in the product, the companies and the brand that we are investing in.  

4. Check Reviews

Reviews can be a tricky one. Years in the industry tells me that customers are more likely to review when they are disgruntled rather than when they are happy. However, if it’s a constant occurrence of 1 & 2 start reviews of repeating similar issues then this may tell me something is not great about the company or products being sold. A lack of reviews may tell me the companies involved are not real. To throw another curve ball into the mix, there are a lot of fake reviews being created in today’s online world. So, you may want to line the reviews up with social media presence determine if you think they could be buying fake reviews.  

5. Look for news report

If you want to a company’s public dirty laundry, then it is easy to do so. Go to Google and select the news tab, then type in the name of the developer and the agent. A quick scroll through and if you can easily find positive or even negative articles on a company. Read through and make sure you are happy with anything you find.  

6. Ask if you can speak to a previous client

Asking to speak to a previous client will be a massive show of trust. If for whatever reason they try to avoid this question or just won’t allow it, then maybe you shouldn’t go near the investment opportunity. Make it clear you won’t move forward until you have done so. It could be tricky as you will also then need some guarantee that the person you speak to is a real customer or that they were not cherry picked for you. As it’s a property investment you may be able to find the owners of certain properties through the property register and ask to speak to them.  

7. Speak to local experts to see if the property can deliver on the promises

If a property investment is not a scam, this does not mean you are being sold a bad product. You will want to do your own due diligence on an investment and its location. You can do this by speaking to local experts including, surveyors, valuers, estate agents and other local builders/developers to ensure everything stacks up with what would be expected in terms of investment numbers for the area (price, costs, yields, occupancy etc…).