Business

High yields come with risk

I PERSONALLY know a builder who pays a spruiker $50,000 to find wood ducks to buy duplexes he builds in boom towns like Gladstone.

REIQ commission would be 2.5% or under $9000.

I personally know a couple of pretty bright guys who invested millions with Atlantic 3, a Gold Coast mob that purportedly managed mortgages but was actually a Ponzi scheme like Madoff's notorious scam in the US. Investors lost their shirts.

Storm Financial grabbed the news because mug punters were encouraged to pile debt upon debt to invest in shares that crashed. Investors lost their homes as well as their shirts. And there are many "mini-Storms" out there which have been lucky to escape negative publicity, believe me.

Recently the Australian Crime Commission and Australian Institute of Criminology issued a report called Serious and Organised Investment Fraud in Australia.

They found 2600 Australians had lost about $113 million in the last five years to scams.

Primary targets are people aged over 50, particularly those running self-managed superannuation funds.

There are 7000 new SMSFs being set up each quarter and now that it is allowable for them to borrow to invest in residential property and "business real property" like leases, the scammers can smell a windfall.

Any property spruiker worth his salt is going to be able to convince naive investors that high rental yields in Gladstone, Mackay, Moranbah, Emerald and so on are as safe as houses and sustainable for the next million or so years!

The bottom line is that the old cliche is true: if it sounds too good to be true, it probably is. The ancient Romans had it right: caveat emptor or buyer beware.

Advisers who tell the truth will tell you that you can test the relative safety of an investment against the 10-year government bond yield, which usually runs at 1 to 2% above inflation. Promised yields greater than that have an element of risk and should be weighed on a risk versus reward basis.

ASIC has tightened the rules. Despite the Storm debacle, invest only on the advice of somebody who holds an Australian Financial Services Licence. Spruikers don't.

Bob Lamont is Senior Partner in Corporate Accountants and Rid Tax situated at the Night Owl centre. He welcomes your questions directed to boblamont1947@hotmail .com

Topics:  investment property storm financial



How to survive a bushfire in your car

IT SOUNDS like a nightmare, but it can happen.

Eight reasons to join the RFS

SPREAD across 93% of Queensland, the Rural Fire Service has about 36,000 volunteers. And you could be one of them.

What if my insurer gives me grief?

CLAIMING your insurance cover after a natural disaster can go one of two ways. It can be a breeze, or like pulling teeth.

Family scoop bargain $160K 'holiday home' in Gladstone

BARGAIN: A Biloela family has purchased 21 Ann St for $160,000. They try to get to Gladstone at least once a month.

ADVERTISED as "renovate or demolish", but snapped up for getaway.

Nightclub hell: Gladstone teen's horror night out

Molly Dawes had drink spiked while out in Gladstone.

"The second time it happened I don't remember anything past 11.30pm.

He burnt teen lover's face, wiped faeces on police cell

**** WARNING: DO NOT LIGHTEN ***TOUGH JOB: Edon Place staff witness the sad cycle of domestic violence in the Bundaberg region each day.Photo: Max Fleet / NewsMail

DISGUSTING, abusive teen smears his faeces all over a police cell.

Local Partners

Gigi Hadid: I'm 'taking the pressure off' myself

Gigi Hadid is trying to "take the pressure off" herself this year.

Ricky Gervais announces first dates of world tour

Ricky Gervais has announced his first world tour in seven years.

Johnny Depp and Amber Heard in 'final stages' of divorce

Depp's outstanding divorce money to be paid over 15 months

Mila Kunis and Ashton Kutcher welcome their second child

Mila Kunis won't be naming her second child 'Hawkeye'

First look at Russell Crowe and Tom Cruise in The Mummy

Russell Crowe in a scene from the first teaser trailer for the movie The Mummy.

HOLLYWOOD heavyweights helm serious reboot of action franchise.

Joseph Gordon-Levitt: Fame is 'unhealthy'

Joseph Gordon-Levitt

Joseph Gordon-Levitt feels bad perpetuating celebrity culture

Family scoop bargain $160K 'holiday home' in Gladstone

BARGAIN: A Biloela family has purchased 21 Ann St for $160,000. They try to get to Gladstone at least once a month.

ADVERTISED as "renovate or demolish", but snapped up for getaway.

REVEALED: Gladstone property prices hit lowest in downturn

Aerial View overlooking Kin Kora residential area, Gladstone.



Photo Brenda Strong / The Observer

GLADSTONE PROPERTY prices have hit their lowest since the bust.

Coast high-flyer's fight back from bankruptcy, $72m debt

Scott Juniper went from millionaire developer to declaring bankruptcy in2012, now he is back on top of his game again with new developments including this one in Coolum.

'Apocalyptic lending storm' causes financial collapse.

Bargain price drop on Tannum 'beach shack'

14 The Oaks Road is on the market for $759,000.

Buy an absolute beach front home for $759,000.

Ready to SELL your property?

Post Your Ad Here!