How to avoid the property sharks

October 28, 2024

In our 21 years of specialist HMO property investments we have seen our fair share of absolute property sharks. We have managed to steer investors away from supposedly “brilliant” investment that would have become an absolute horror story. Below are the top 5 things to look out for when it comes to avoiding property investment sharks.

Companies house check:

It is always good to see how long a company has been trading for, and who the directors are on companies house. The information on companies house is government information and cannot be doctored or manipulated. You want to see healthy financial statements showing a good income and a strong balance sheet (you would have to suspect a company trying to sell you an investment if they do not have investments themselves).

Tenure of place of business:

Fliting about from virtual office to virtual office, or even not having long standing routes for their business may tell you a story that you don’t want to know. Trust us, we have seen this first hand and does not end well.

Working out of registered offices:

How serious is a company that works out of a makeshift office or a PO Box, a good way to check this is to ask the company if they would mind you coming the very next day to visit them in their offices at their registered address. You will soon find out how panicked they are or how amenable they are to greet you at those premises.

Time they can evidence of been in business:

If you are going to trust an investment firm with hundreds of thousands of your hard earned cash, you’d at least expect the company to have a reasonable degree of expertise garnered over at least a decade, otherwise you have found someone who simply has a job in property.

Own the asset from day one:

Ensure that you own the whole of the asset in your (or your companies name) from day one. You should always make sure that the property is yours, and only yours, from day one of your money getting handed over by your solicitor and gaining a legal sole title on the same day. We always ensure that our clients 100% own the asset from day one, and have done this for over 20 years.

Don’t trust a companies assertion that they have done lots of developments:

Always ask for evidence of previous work carried out by a property investment company. Any reputable company will be able to reference old clients via land registry that the client owns the property the investment company has developed (This can be easily crosschecked on land registry and companies house). Don’t be lazy and not check, this is your money you are protecting.

Ignore the gross figures, always go off the NET figure:

Gross figures are vanity, NET figures are sanity. It is the net figure that arrives in your bank account, gross figures make very little difference to you as an investor. If the investment company hides NET figures be very wary because NET figures are the only figures that land in your pocket.

Investment company/development company claiming they have big infrastructure and team:

It is easy to appear far larger than you are online, be wary of companies that claim they have a large team and infrastructure behind them when they don’t, any company that has

Here at Foot Forward Property Investments we always advise clients to do their due diligence, and we always operate with 100% transparency. If you are looking for a reliable investment firm to build you a high yield, fully managed portfolio contact us today.