BEWARE OF PROPERTY GURUS
Property gurus & experts
The rise in the buy-to-let residential investment market has been accompanied by the appearance of the so called ‘property guru’ or expert. These ‘gurus’ spend all their time instructing property investors how they too can make millions out of investing in residential property if they just follow their plan. This normally costs ….in many ways!
I’m instantly suspicious of anybody that appears to want to tell you how they made a million and how you can do it too. My question is always…. why if you have found such a brilliant way of making money would you want to share the secret with a whole load of potential competitors? Are they completely mad and having discovered the recipe for making gold out of sand and water they want to give away the secret to everybody. Perhaps they are like a charity or social enterprise and they want to give away their property secrets to everybody but if so and they are doing it for the love why charge?!
Why are so called property experts charging?
The answer is normally that these property gurus are trying to sell landlords something and make money in the process. They feast on the froth of a buoyant property market. Most property gurus have traditionally tried to sell residential investment property for which they will receive a commission from the seller or the development company. They act as a property agent taking a commission from the agent or developer each time they sell a potential buy-to-let investment.
Other property gurus will promise the unsuspecting or novice investor a fool proof system and invaluable advice on how to build up a buy to let portfolio in double quick money and without any cash to put down as a deposit. Nice!!! All they need from the unsuspecting investor is a few hundred or thousand pounds to reveal all their property secrets.
Property guru warning
Any landlord looking to follow the advice of a ‘property guru’ needs to stop and think first, what are their motivations?
Property investors should make sure not to get caught up by a guru’s flash car, confidence, swagger, promises and pictures of a bright and wealthy future.
Instead what property investors should do is:
• Do as much research themselves. Use the internet to dig around and find out about the gurus proposition and their background. Could it well be that the guru is not quite what they make out they are. Have they been in trouble with the law or their professional body.
• Try and understand why residential investors closer to the proposition aren’t ‘snapping’ up the investment opportunity. For instance if the investment proposition is so strong in the US, the heart of global entrepreneurship then why aren’t all the local landlords and property investors falling over themselves to buy such great property investments.
• Ask the most pertinent question. If these residential investment properties are such great property investments why are they not keeping quiet and buying them all themselves. To which they may reply that; ‘they don’t want to be greedy and that they have enough money already’. In which case you may want to suggest that they refund any commission that they receive for their sales.
After this careful research by a landlord it may well be that the residential investment proposition, and indeed the ‘property guru’ is not all they seem to be.
What happened to the property gurus?
Well as you would expect some property gurus despite their fabulous insights have not fared so well. Here is a little update of some of the property gurus who have come and gone over the years.
Some of our landlord property investors may have heard his name before, Nick Rampley-Sturgeon. His book was published by the Financial Times publishing house Prentice Hall under the title ‘Buying to Rent’. You may have attended one of his ‘Property Bootcamps’. Apparently Nick didn’t take his own advice as his residential investment properties located mainly in Daventry were eventually repossessed. The unfortunate Mr Rampley-Sturgeon who was the subject of an article back in 2004 in the Financial Times entitled Bricks & Slaughter has now moved to the States. It seems a posh name and a book published by the FT is not always enough to guarantee financial success.
Grant Bovey the high profile ex husband of Anthea Turner has experienced a mixed ride with his business Imagine Homes that sought to provide a one stop solution for buy-to-let through his company Imagine Homes. Unfortunately, the buy-to-let bust caught up with him and laid him low. Whats that about not “putting all your eggs in one basket!?”
A property guru who promised not only how to make you a buy-to-let millionaire but a billionaire. No small claim. Unfortunately his own advice was not enough to save himself from his own ineptitude as his millionaire scam was closed down and then ultimately this property guru bites the dust.
Not all property gurus have faired so badly. Ajay Abuja, accountant and one time author of the Buy-To-Let Hotspot and previous property guru has left the talking to other people and after a number of years of promoting himself as a property guru has clearly found it far more profitable at building up his own property portfolio of 200 properties. This proves my point that actually if you know what you are doing and are good at it there is more money in doing it yourself than trying to sell other people the buy-to-let dream.
Watch out for the buy-to-let sharks
A word of warning is that there are still property gurus out there that profess to be able to provide you with the secrets to property investing success. Many have gone bust and then popped up several years later with a new name but still doing the same thing badly.
Me…I’m ticking along nicely, but then I don’t profess to be any kind of property guru. My advice is for free…and has been hard earned through 30 years of property investing. I’m the first to admitt I’ve made some successful investment decisions and some less brilliant moves. I like other landlords continue to learn and evolve my approach through experience. Here’s to another 30 years of successful investing. As a Norwegian Cruise ship captain once said to me before we headed off on a particularly choppy part of the voyage “buckle up and enjoy the ride!”
Property Hawk unbiased comment on UK residential investment for UK landlords.