These schemes are not illegal, but rather, just very bad ideas.

With house and land package schemes (scams), the basic concept is to buy house and land packages not as investments but with the intention of on-selling or trading the properties at completion date.

Buying a house and land package under the assumption that value increases exponentially at the time of completion is very naive.

There is no margin in house and land packages, that allow for a trading profit and there is also tax and stamp duty to consider.

Most house and land packages are in outer suburbs that feel it the most when interest rates rise, as the demographic is typically more affected by inflation.

Trading off the plan property schemes, are when the buyer is shown blueprints of a property and buys it with the plan before settlement.

The concept is that the buyer won’t have to come up with the full purchase price and can potentially profit from the capital growth over the construction period.

This scheme appeals to appeals to investors, who want to make quick profits by taking short cuts but the risk is, that the property could be worth less at settlement than originally anticipated, eroding the chance of any profit.

The main risk with this scheme is that these types of developments are very popular and there is no scarcity value, which sinks the property price

Often, the prospect of selling the property at the cost of purchase is not even possible and the hapless buyer has to cough up the difference or settle.

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