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How to Recognize Property Investment Scams

Real estate has long been a solid way to make money, but that doesn’t mean every property investment is good idea or even legitimate. There are con artists at every turn who would like to scam you out of your money, leaving you poorer but wiser. Here’s how to recognize property investment scams.

Instructions

  1. Know you’re vulnerable. Experts say the people most likely to be the victims of property investment scams are financially astute. Con artists know that they need to start with someone who is open to investing instead of being more conservative with money. Be careful not to be overconfident, since scammers can set up elaborate schemes that can fool even the best.
  2. Remember the old adage, “If it sounds too good to be true, it probably is.” Be skeptical on promises of high, fast returns. Nothing of that nature comes without high risk, so consider what you can afford to lose. Be wary of email or infomercial offers, since they are favorite delivery methods for people who traffic in property investment scams.
  3. Check everything out. You can often recognize property investment scams just by doing your homework. Look into the company making the offer, and find out their history, record and background. Figure out who the directors are and look into their background. Let an accountant or financial advisor look over the paperwork, and then have a lawyer read everything before you sign.
  4. Understand how you will make your money. The more complicated the deal, the more important it is to look into the exact way your investment will create a return. Investigate any tax laws, especially in overseas countries, that backers are relying on to bring you money. Be sure the offshore investment is legal.
  5. Ignore pressure. One sign of a property investment scam is when backers are in a great hurry for you to sign. Hurrying only increases your risk of being a victim and losing a substantial amount of money.
  6. Watch for affinity fraud. That’s the name for how con artists use your religion or race and purport themselves to be “like you.” Once they have your trust, they can work their property investment scams.
  7. Keep up your vigilance. Even if you start seeing the promised return on your investment, don’t assume that all is well. Some con artists pull off property investment scams by paying out money for a time, then disappearing when they have a certain number of victims.