Reasons to beware of online property gurus: 3 myths busted

Social media is saturated with property “gurus” promising financial freedom, passive income, and “no money down” deals.

These charismatic “experts” are extremely persuasive, and they can make property investment look like an attractive opportunity to grow your wealth, retire early, and achieve financial freedom.

However, bear in mind the adage – if it looks too good to be true, it probably is.

Read on to find out why relying on property gurus for investment advice might be risky and discover the reality behind three common myths they may tell you.

Reasons to be cautious about online property gurus

Turning to online property gurus for guidance on your investments carries several risks. Here’s why:

Their income often comes from selling courses, not property

Many of these individuals earn their money from selling property courses, workshops, subscription communities, and mentoring packages – not property. In other words, they’re selling education rather than demonstrating the long-term potential of property investing.

After all, if their strategy is genuinely as low-risk and high-return as they typically suggest, they would have less incentive to sell courses.

There may be a conflict of interest

If a person’s business model relies on selling property strategies, they are motivated to emphasise the positives, downplay the risks, and highlight best-case scenarios.

As such, their advice is unlikely to provide a balanced and realistic view of property investing.

Social media amplifies success stories

Property gurus fill their social media accounts with curated wins – the first-time investor who doubled their money on a single renovation project or the couple who retired early after building a buy-to-let empire in just a handful of years.

You’ll rarely see evidence of failed refurbishments, legal disputes, tenant problems, and cash flow stress during periods of high interest.

This could give you unrealistic expectations of property investing.

The profits they promise are often unrealistic

Case studies that are designed to showcase how lucrative property investing can be – “Quit your job in 18 months” or “retire in five years” – might omit important costs.

Unfortunately, a strategy that looks profitable on gross yield may be much less impressive after taxes and fees are deducted.

They’re not directly regulated

Typically, online property gurus do not require licensing, and their courses aren’t accredited by any governing body. Neither are they regulated by the Financial Conduct Authority because what they’re selling (courses, and so on) generally doesn’t fall within the scope of regulated financial advice.

Regulation can apply in some circumstances, for example, if an individual offers advice on regulated investments. However, many gurus use disclaimers, such as “This is for educational purposes only”, and “This is not financial advice”, to avoid being accountable to regulatory bodies.

This means that there is limited transparency about property gurus’ qualifications and credentials. Moreover, if you act on their advice and this has negative financial consequences, compensation is unlikely.

3 common myths you might hear from property gurus – busted

If you spend any time on social media, you might have seen some of these bold claims before, but do you know the truth behind the myths?

1. “Property always goes up in value”

The myth: You may hear statements such as “Property doubles in value every 10 years” and “Just hold it long enough, and you’ll always win”.

The UK has a deeply embedded culture of property ownership, with many people believing that investing in physical bricks and mortar offers guaranteed security and profit.

The truth: While UK property has risen in value over the long term, prices haven’t increased consistently.

There have been extended periods of stagnation, regional price declines, and some investors have made real-term losses due to inflation. For example, in the early 1990s, many property investors and landlords fell into negative equity (where the value of the property falls below the outstanding mortgage balance).

In other words, there are no guarantees, and while you may achieve long-term growth from property, you could also face short- and medium-term losses.

2. “Rental property is a great source of passive income”

The myth: “Passive income” – earning money with minimal ongoing effort – has become a buzzword in personal finance over the past 5 or 10 years. Indeed, property gurus often claim that buy-to-let is an easy way to bolster your income without adding to your workload.

The truth: While some online influencers may describe property as the ultimate source of passive income, this is rarely the case.

As a landlord, you’ll likely have to manage maintenance requirements, tenants’ needs, legal compliance, and plenty more. In other words, renting property typically involves significant oversight, time, and potentially stress.

Of course, you could pay a management service to take care of these tasks, but this will eat into your profits.

3. “Leveraging makes property investing low-risk and high-return”

The myth: Property influencers like to talk about the power of leveraging. They may say something like, “You’re using the bank’s money to buy the property, so your risk is lower, but you’ll still benefit from all the growth”.

The truth: Leveraging simply means borrowing money to increase the amount you’re able to invest. For example, you might put a £75,000 deposit down and use a £225,000 mortgage to buy a property worth £300,000.

In this case, if the property rises 10% (£30,000) in value, this represents a 40% gain on your £75,000 deposit, which might look impressive.

However, leverage magnifies losses just as effectively as gains.

Imagine the same property falls 10% in value to £270,000. If your mortgage is still £225,000, your equity falls to £45,000 – 40% of your original equity.

Also, remember that interest rates could rise, potentially increasing your mortgage repayments over time.

Get in touch

There’s good reason to approach online gurus recommending property investment with caution.

If you’re keen to grow your wealth for long-term security and financial freedom, we can help you build a diversified investment portfolio that aligns with your circumstances, life stage, and goals.

To find out more, please get in touch.

Email helpme@aspirellp.co.uk or call 0117 9303510.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

The Financial Conduct Authority does not regulate buy-to-let (pure) and commercial mortgages.