Many people jumped on the band wagon in recent years of buying up cheap, run down properties. The intention was to renovate them and either sell them on or rent them out. The enthusiasm for buy to let property was fuelled by an influx of fashionable TV programmes making it all look so easy. TV crews could follow the ups and down of property investors, showing the extremes of circumstances and after half an hour the viewers would be shown a house that looked great from a distance but was built from MDF.
The main concern of these programmes was to make the house buyer look like the village idiot with some carefully edited programming and then to make the presenter look like they always knew better by advising and then congratulating them on the thousands of pounds profit that was eventually gained in order to put down as a deposit on the next property.
Many people saw this as a quick money maker with the result that there is virtually no cheap property left anymore. And it wasn't just the individual or the TV producers that cashed in on this trend for buy to let properties.
One company was set up in a bid to encourage people into this area of investing. Inside Track claimed they would be able to turn people into property tycoons with their advice. Unfortunately, they have just gone into administration themselves. Maybe they should have bought up more cheap properties themselves.
The company grew into Britain's biggest property investment company by encouraging people to buy strings of new-builds to rent out. The purchases were meant to be at discounted prices with a view to making the owner money as buy to let properties.
Many people have since suffered financial loss in the current credit squeeze that has led to mortgage freezing by banks, falling house prices and below average rent yields. This particular company went for ambitious advertising and property seminars, aiming for the high-profile market.
Inside Track made their money by enticing people in with a free workshop on how to handle buy to let property investments and would then encourage them to sign up for the same advice but stretched out over a weekend, at a cost of at least 2,500. pounds They did this by promising opportunities to buy off plan properties at reduced rates, thus ensuring a get rich quick scheme of the sort we should all know by now never work.
In a style usually saved for pyramid selling or timeshares, subscribers were then pressured into signing paperwork to buy places there and then in a bid not to miss out on a bargain. They were then offered membership of a property club run by the company's sister business and this came at a cost of 10,000. pounds
The advertising bumpf that comes from Inside Track promises that you will be able to break into the 'inner circle' of property investment by purchasing buy to let property off plan before it is even built, saving wads of cash and reaping the benefits when you rent out or re-sell.
Investors have become disappointed and angry that they are actually now losing money because the rental yield is not even meeting mortgage payments and costing them thousands. The mistake the company made was that they assumed house prices would continue to rise and had no contingency plan to cover the opposite.
They also didn't allow for the problems, or even fluctuations, in mortgage accessibility. Where buy to let mortgages were once readily available this is no longer the case since banks have been clamping down due to lack of funds.
Many of Inside Track's investors are considering legal action against the company who's profits totalled millions of pounds several years in a row, in a bid to recoup some of their losses.
Property expert Catherine Harvey looks at the buy to let property market and how it is fairing in the current climate.