Using Investment Companies?

Hi everyone,

I would just like everyones opinions/thoughts about the investment company Prowealth or others that are similar.

I have attended one of their seminar days and have now had an initial consultation with one of their members.

I would like peoples opinions about using companies such as these or if you think it is best to do all of the work yourself?

One thing that worries me is that they are a Newcastle company and have only recently moved an office to Brisbane, do you think that they would have the knowledge to invest in Brisbane?


Any feedback good/bad or indiffernet would be valuable.

Thank you very much.

 

Investment Companies

Hi 51ama,
I have a lot to do with investment companies Australia wide and I have found that no matter what state their business is in most of them don't limit themselves to just one state instead they thoroughly research investment opportunities in every state. Many of them often fly interstate on a regular basis to inspect the properties and their development progress. It's quite possible Prowealth have consultants that are QLD "locals" or they are very familiar with the state. I guess for your piece of mind is to ask a QLD investment company where is the best place to invest then ask Prowealth the same; compare and research both answers.
In regards to your own research or using an investment company, I would keep in mind that investment companies such as Prowealth have all the resources, knowledge and experience necessary to carry out an effective and thorough research.

Hope this helps

 

51ama,

Good question, and JoTPCA, good insight in to how these companies manage being in more than one state.

 

Thanks heaps JoTPCA,

I have found that the areas that this company is suggesting are on the money with other investors.

I think the biggest hurdle i have to overcome is the nervousness that a company may "rip" me off. I have heard many stories about similar companies doing the dogdy.

 

Hi Again 51AMA
Yes there are a few companies that are dodgy. I haven't had any feedback on this particular company but if you can leave it with me for a few days I will get back to you on this. The main thing you need to consider with your investment are:
1. Ensure that the home you are buying or getting built is with a reputable builder. Do that by asking if you can visit the building company's office. Look through their website and find out how long they have been in business for. If you cannot go to their office phone them and take into account their professionalism and how contactable they are. Find out as much as you can about the building company.
2. Make sure the suburb you are investing in is not "booming" due to resources and if it is what type of resources and how long are they likely to last (High gains may not turn out to be good investments). Sometimes it is more beneficial and safer to invest in something that will give you a lower gain which will be constant; e.g. There is a suburb in The Hunter which is returning 6.8% but it is depending on the mines not closing in the near future as compared to another suburb in the Lower Hunter that is returning 5.7% on the merit of the suburb itself and not dependent on anything else.
3. Ask to be shown through one of the building company's homes so you can view their finished product.
A friend of mine is renting in an investment property on The Central Coast; the home is of fantastic quality. I was that impressed that I looked into the building company and found out that they have been in business for over 34 years; the builder employs the tradespeople (not one sub contractor) and he has a team in his office that looks after everything from go to whoa (legals, accounts, land acquisitions, home designs etc) plus he owns over 200 registered trucks, excavators and other machinery needed to build homes. I phoned them and was invited to meet with them where they gave me a tour of their office; totally impressed and I would not hesitate to invest in one of their properties.

I hope this has been of some assistance and if you need some feedback or information where you are buying don't hesitate to let me know what the suburb is and I can probably give you some feedback.

 

51ama,
The real issue is whether they are working in your best interests or theirs?
How do they get paid?
Do they disclose commissions they (may) receive if they recommend or sell certain properties?

Many 'investment' companies are simply sales agents proporting to be investment companies helping the client. I do not know Prowealth and make no calls on them. That said, I get approaches a lot from various investment companies to get access to my client database or for me to 'recommend' them to my clients looking for investment properties - in return I get a commission split and it is very healthy. Most are large off the plan developments I would not touch with a 10' pole for a client unless they had a particular need for new and stamp duty savings in Victoria. Even then the risk of short valuations is too high.

Do you research, ask them what their history of capital growth and rent yields are on previous developments? If they do not know, keep away, it is simply another sales company.

Good luck.
Greg

 

GregR,
You certainly are right in many ways but I do know there are some companies out there that do have investors interests more so than just their own. There is nothing wrong with off the plan development as long as the builder is reputable and has good ethics. My parents have 3 investment homes with 2 being off the plan and one being a completed building (different builder); they have no issues with the off the plan homes, what they saw in the plans is what was built but the completed one is a different story, actually it's a nightmare. Whether you are purchasing a $10 toy or a million dollar home it all comes down to the retailer, their stock and their reputation same with companies, it all comes down to the integrity, the compassion, honesty and understanding of who you are dealing with as to whether you get ripped off or your needs fulfilled.