Following our recent article on property investment academies and the questionable activities of some operators, we asked the leading player in the market what should happen next.
Last monthLandlordZONE shone a light into the famously Wild West world of propertyinvestment academies, many of which are hugely popular with novice investors.
As our investigation showed, thousands of people have been attracted to this sector by the promise of making both income and capital from property, often with small amounts of '� or zero '� initial cash to invest themselves.
Their enthusiasm isunderstandable; courses offer the training needed to operate rent-to-rentschemes that enable '�no cash down' investment as well as the opportunity toeventually become a more traditional buy-to-let investor.
Many propertyacademies are mini businesses by themselves, charging between �1,000 but up to�15,000 for courses that offer mentoring and access to deals and mortgageproducts.
The problem is thatit's unregulated despite those within it handling tenant deposits,down-payments on properties and signing leases that can last five years.
These academiesvary in what they offer but the best-known and biggest is Progressive Property.
It claims not toemploy the high-pressure sales tactics and provide the low-quality trainingthat its less scrupulous competition are well known for, and says that if the restof the property academy world adopted its approach, it would be a better place.
ProgressiveProperty has been around for nearly 15 years and is based in Peterborough, asare many of the properties it manages or owns.
Its co-founder, RobMoore, is considered to be the '�king' of the property investment trainers. Doeshe think the industry needs more regulation, a key message that emerged from ourarticle.
'I would be worried if regulation gets a bit too heavy handed and you use a sledgehammer to crack a nut,'� he says.
'A good example isthe '�sale and rent back' or SRB sector that flowered briefly [during thenoughties until being shut down by the Financial Conduct Authority in 2012].
'Because of a fewpeople were slightly abused by SRB operators, it then became over regulated andit ceased to be a commercial opportunity any longer and essentially [the FCAactivity] stopped the sector in its tracks.'�
Moore says the propertyacademy sector should work together to stop a similar scenario developing.
'The one thing allof us operating within this market have in common whether we are a landlord,investor, educator or a commentator on a LandlordZONE forum or even a critic,is that we all agree that property is a great asset class.
'We should be moreunited in remembering that and we shouldn't have this big divide and should insteadwork together more to create voluntary regulation and a code of practice.
'I'm up foranything that protects the new property investor, but I don't want to see the regulationto be so heavy that you can't say or do anything.'�
Moore claims thatwhether you love or hate property academies, companies like his have providedthousands of people with new careers and pensions, and that heavy-handedregulation could end this overnight.
'Capitalism and thefree market is always a balance between innovation, creativity, competition andregulation '� too little regulation and you get the Wild West, too much and youkill the market,'� he says.