My hubbie and I are absolute beginners in the property investment business and have been looking at going with Heritage Financial Group who seem to handle everything and “hold your hand” through the process. We thought this may be the best way to go for our first property. I know that people can’t be too critical on this forum because of fear of legal action, but I was hoping that someone would be able to give us some positive feedback – perhaps someone who has had successful dealings with them.
Here’s hoping for some advice.
Jeannie[
]Hi Jeannie,
Without knowing Heritage I can only post a copy of a response I gave to some else asking similar questions about another group. Hope these are of use.
Some thoughts for you to consider.
1. How long have Heritage been in business?
2. How many investment properties does your ‘consultant’ own?
3. How long has your consultant been investing?
4. How does your ‘consultant’ earn their money?
5. What will they get out of each and every purchase?
6. What service do they offer?
7. How much does it cost to use each aspect of their operations?
8. Can you use your own mortgage lender? property manager? valuer? If not – why not (it is a free world)?
9. What sort of after sales support do you get?
10. Does their approach fit comfortably with you?
11. How much pressure is bought to bear?
12. Are all decisions made in Heritage’s presence?
13. Are there rent guarantees? (Run away fast if there are!)
14. How does the price compare to similar properties on the open market?
15. ASIC/ Ministry of Fair TRading Issues?
16. Where have Heritage’s past sales been? What were they? How much is the open market paying for them now? What are they rented for now?
17. What are similar properties (to the one being considered) renting for? Check with a couple of REA in tthe area?
18. What is the vacancy rate in the area like?
19. What infrastructure is planned for the area?
20. Are brochures high on ‘gloss’ and ‘glitz’ and low on facts?Just a few to get you started.
At the end of the day only you will know what suits you and your situation.
Derek
Originally posted by Derek:Hi Jeannie,
Without knowing Heritage I can only post a copy of a response I gave to some else asking similar questions about another group. Hope these are of use.
Some thoughts for you to consider.
1. How long have Heritage been in business?
2. How many investment properties does your ‘consultant’ own?
3. How long has your consultant been investing?
4. How does your ‘consultant’ earn their money?
5. What will they get out of each and every purchase?
6. What service do they offer?
7. How much does it cost to use each aspect of their operations?
8. Can you use your own mortgage lender? property manager? valuer? If not – why not (it is a free world)?
9. What sort of after sales support do you get?
10. Does their approach fit comfortably with you?
11. How much pressure is bought to bear?
12. Are all decisions made in Heritage’s presence?
13. Are there rent guarantees? (Run away fast if there are!)
14. How does the price compare to similar properties on the open market?
15. ASIC/ Ministry of Fair TRading Issues?
16. Where have Heritage’s past sales been? What were they? How much is the open market paying for them now? What are they rented for now?
17. What are similar properties (to the one being considered) renting for? Check with a couple of REA in tthe area?
18. What is the vacancy rate in the area like?
19. What infrastructure is planned for the area?
20. Are brochures high on ‘gloss’ and ‘glitz’ and low on facts?Just a few to get you started.
At the end of the day only you will know what suits you and your situation.
Derek
Thank you for sharing. I just wondering, did you actually ask those questions whenever you deals those property consultan’s group?
Warm Regards
ChanDollars
[Keep going, you’re on your way to Frolic Freedom!]Hi Chan$,
These are examples of the ‘answers and details’ I provide for people who I work with when discussing property investment (in my spare time)
derek
Hi Derek, Can you tell me why you would ‘run away fast’ if there is a rental guarantee? Is this because they have basically built the rent intothe purchase price or insurance cost?? Just wondering.
Thankstraceytd
It is illegal to control a client through a complete process all sections must be done by independant qualified and licienced companies. Controlling the client comes under the department of fair trading.
Seek independant legal, finance, accountant, financial planners, valuers etc to miminase any losses or mistakes, ask the CONsultant for their qualifications.If you “go with” these people, they will go with your money. You don’t need them.
Stay safe
Bec
[:X]GOTTA LOVE BEC..WATCHING OUT FOR US ALL[^]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
So you don’t want me to tell ya, eh?
Well, my apologies, fellas. There is something about me that has always shuddered at the thought of others losing money.
I know some don’t share these views and others will mock them. But, hey, if I saved that one person from losing their money, well, it is worth the riducle from those who don’t care.
Sad Bec
Hey There Bec….
It seems like there may be very good reasons for your reponse. May we ask you to share the experience that you may have had to give you this view?
I am sure we would really value your shared experience and give us some real food for thought.
Cheers,
Kiwi
[]Seeing as you asked nicely, Kiwi, sure.
Ask Heritage to give you the addresses of all the developments/estates (or whatever they’re called) where they have sold properties.
And then do some research and look at what happened to the people who RE-SOLD those properties at a later date.
It’ll be like looking into the lung of a smoker.
Time to QUIT having anything to with these sorts of companies.
Cheerio for now
Bec
“Hi Derek, Can you tell me why you would ‘run away fast’ if there is a rental guarantee? Is this because they have basically built the rent intothe purchase price or insurance cost?? Just wondering.”
Most of the time it is, Mirvac for example gurantees to pay rent for 1 yr. The problem is that is indeed built into the price (One of my mates was a contractor on one of the larger sites, so I was privy to some interesting stuff!).
If you decide to go with thse people make sure you get good independant advice (Esp. in terms of prop. value!!), and as Derek said how much control do you have??? You don’t want to give to much away. Also do NOT accept their figures at face value at all. Always run through them yourself, or ask one of the many contributors on this foruum to help you out!!
With units beware of Strata and management fees, alot of the time these can be avoided but companies skim alot of extra profit by saying they are neeeded, and you can’t do much about these added costs (for holiday lettings there my also be a large advertising fees).
There is nothing wrong with people holding your hand, you just will pay for it (as it is a service) along the way, just make sure there not getting paid too much for the service they are offering.
Rgds.
Lucifer_auGood morning Lucifer!
I don’tbelieve there isa problem with rental guarantees… a lot of the 1-bed apartments in melbourne (city/carlton areas) have rental guarantees because they are rented to students or are presumaly used by motel chains. The guarantees are also renewable. I see nothing wrong with that. I am talknig about apartments- studios and 1-beds- which have guarantees of about 8%.
I am not talking about generic OTP’s. I think guarantees are great in an established market. Why not take on a renewable guarantee for a cheapy apartment (under 150k)? A guarantee is better than a vacancy.
But i reckon buying a docklands/southbank apartment at $350 +++ is buying into trouble- as soon as the guarantee is over, one is likely to get only 2/3 of that as it becomes a tenants’ market.
My hit prediction [
]kay henry
A Big Thanks to Bec…. I think the moral of the story here is to make sure you do “Extreme Due Diligence”…. Comb all contracts for “Fishy” clauses…. and get an independant Valuation for yourself…. although this may not protect you 100%… as even valuers sort of use crystal balls to ascertain values (especially if there have been no sales in the building you are looking to buy in).
If there is a gaurenteed rental then you should consider this and plan for an alternative solution to this problem…=PRIOR= to the problem arising.Anyway good hunting Ladies and Gentlemen!
[^]Thanks everyone for your input. We have alot of thinking and research to do. But your views have all been taken into account. This is definitely not in my comfort zone. Many a sleepless night has been had so far.
Hope it will be worthwhile.
Cheers for now
JeannieHi Jeannie,
Rental guarantees can be used to distort investment reality and can make the cashflow figures look better than they really are as the guarantee is often above market rates.
Under these circumstances someone has to pay the above market figure – and don’t think the marketer is being benevolent – you are paying for the subsidy.
The easiest way to check this is to see what the market rate for similar properties is exclusive of any rent guarantees.
You will need to check who provides the guarantee. I have seen guarantees provided by insurance companies – some of which are no longer in business.
Ultimately the best investments are those that perform well in the open market.
Derek
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