Investors seek security in property

THE collapse of the dot.coms, a slowing world economy and the floundering Aussie dollar has sent many Australians running from the volatile stock market and investing their savings in property.

And to give themselves an edge in the world of property investment, many are turning to courses, clubs and ‘experts’ for advice on where and how they should spend their money.

But according to established property organisations, caution must always be exercised when taking advice.

Real Estate Institute of WA public affairs director Lino Iacomella said current legislation did not require that people giving general property advice have any qualifications.

“Anyone can speak on the benefits and advantages of property investment,” Mr Iacomella said.

“There is no requirement necessary for people to provide general information or guidance.

“But where a person is giving personal investment advice, then they are required to be a licensed financial adviser.

“It is good that the general information is out there but in relation to specific financial matters, then competent advice needs to be obtained.”

Property Research Institute director Tracey Baker agreed, and said while organisations such as the institute provided much useful information, it was important that investors did their own research and obtained financial advice.

“Our role is to educate investors, we are a research body,” Mrs Baker said.

“We research areas to find out which are expected to perform better than average and we pass that information on.”

She said all knowledge passed on at the institute’s regular information evenings had proven successful for investors, including herself and her husband.

“We are not preaching and then not doing. We practise what we preach … property investment has worked well for my husband and me,” Mrs Baker said.

“We are experienced investors in our own right who draw on life experience and passing it on to others.

“We know the pitfalls and we are keen to pass on that knowledge.”

Mrs Baker stressed the institute itself did not provide financial advice, but rather supported people in the property investment world.

“We have a mentoring system which keeps new and experienced investors in touch and where the more experienced investors help others through what can be a difficult decision making time,” she said.

“We don’t claim to know everything, we are simply giving information to help people make up their minds.

“And we are not financial advisers, although financial advisers are regularly at our information evenings.”

Home Financial Planning senior financial planner Cathy Charteris said financial planners played an important role in helping property investors make informed decisions.

“When considering investing, investors should be asking the question,what do I need my investment to do for me and what risks will I be exposed to?” Ms Charteris said.

“ Many investors make the mistake of investing purely to reduce their tax or because they are led to believe they will achieve a high return without considering the associated investment risks.”

And while the realm of property was full of excellent investment opportunities, Ms Charteris encouraged people not to turn their backs on the share market altogether.

“Property investing can provide investment opportunities, but investors who are considering property investment should seek advice on how they can invest in property and not rely on one asset to provide the investment performances they desire,” Ms Charteris said.

“The role of financial planners is to advise investors of their investment opportunities, how the investors can reduce their investment risks, provide strategies and written recommendations on how they can achieve their financial goals.”

Investors Club of Australia WA branch manager Barry Atkins said his organisation had incorporated a fully-fledged finance department to assist members in their property investment ventures.

He said joining the club was free, unlike other courses or speakers who charged for their advice.

“We don’t charge anything for our services. It’s not like we get people hooked on a $30 course that eventually costs them thousands,” Mr Atkins said.

The six-year old organisation has a growing membership of more than 50,000 investors nationally, 9000 of which are based in WA.

Mr Atkins expected this membership to continue to grow as people returned to the property market.

“People like to invest in property, it is bricks and mortar that they can touch and feel,” he said.

“Property has historically proven to be better in terms of inflation, it is always two to four per cent higher than the inflation rate.

“The value of property is compounding at about 8.5 per cent a year.

“Property is a secure investment, that’s why people say ‘it’s as safe as houses’.”

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