Are you planning to invest in Real Estate? If so, you must know that investment scams and frauds are pretty common in this business. 

In the following article, we have provided some guidelines to identify possible scams and fraudulent investment opportunities, as well as strategies to avoid them. 

The following are some fraud methods scammers typically use:

1) Fake Rental Ads:

In this situation, scammers hack real property listings with their own data. Sometimes, they even use old rental ads and make them look as new. Once they receive interest from a naïve investor and ask them to wire the money, they disappear. 

These types of frauds are always in online-unverified sites, so always do your proper research and rely on known experts, which can help with their opinion.

2) Poorly maintained properties sold as new:

As a Real Estate investor, you are likely to search for relatively cheap properties in sites with high potential for growth, far away from home. Many scam artists take advantage of this and often lie about the condition of the property they’re selling. 

For example, they advertise the property in mint condition when it’s actually falling apart. In addition, they could have fake reports made by phony inspectors supporting their evidence. 

To avoid this fraud, make sure a local and trustworthy party does proper inspections and verifications on the property you’re interested in.

3) Fake owners: 

In this case, scammers will lure you in buying or investing in a property that isn’t owned by them. This is most common in empty land lots or vacant developments. 

Once you make a first deposit, the fraud sellers will disappear with your money.

To avoid this fraud, always verify who actually owns the land or property you want to invest.

4) Phony Investment Seminars:

These types of events, hosted by “investment gurus” are very common, and often demand a high entry price to participate (around $30.000). They often promise secrets for safe investment opportunities with high returns. 

Keep in mind, investing is never 100% secure and always involves some degree of risk, so be skeptical of individuals who make these types of promises, but most important, avoid these seminars as those who run them will probably rush you into investing in a “great opportunity”.

Now that you can identify common investment frauds, here are some simple steps you can take to ensure the reliability of your investment.

1) Always get professional assistance:

Do not engage investment opportunities without the help of a lawyer and a professional and registered broker.

2) Get everything in writing:

Before you spend any of your money, make sure your lawyer settles proper paperwork that requires the selling party to identify themselves.

3) Verify who actually owns the property: 

And send trusted inspectors to check everything is right.

4) Do your proper research:

As in everything, make sure you are behind the information you gather. Take your time to research as you are probably putting lots of money into your planned investment opportunity.

About Us:

Neoterre Lifestyle Developers has over 30 years of experience in real estate, so we know a thing or two about this business. If you are interested in any further information regarding Real Estate investments, get in touch with our team and we will happily assist you.