With so many more people wanting to invest where they don’t live, research has become so much more important. Propertyology’s business model enables everyday Australians to invest in locations other than where they live. We talk to Simon Pressley about just how many people are doing this and how they can be sure they are getting good information.
Kevin: As we all know, research is the key when it comes to putting together a good property portfolio. I guess one of the things that technology has helped us with in recent times is being able to get access to a lot more information through the Internet.
Interesting to note that Propertyology – which is a company we tell you about in the show – has just named as Queensland finalist in the prestigious 2017 Telstra Business Awards because of what they’re doing with technology. The man behind Propertyology joins me, Simon Pressley.
Simon, congratulations on getting to the finals.
Simon: Thank you very much, Kevin. It’s something that the entire Propertyology team is very, very proud of. It’s years of hard work trying to revolutionize – I suppose – how people go about investing in property.
Kevin: Technology or the Internet has allowed businesses like yours to flourish, and I know you spend a lot of time looking at the data that’s on the site. Interesting to note that you say 95% of your clients don’t reside in their home city. So there’s a lot of investing going on outside, Simon. I read into that?
Simon: It would be correct to say that our business wouldn’t exist. We wouldn’t be able to do without technology, certainly in its current form. Gone are the days where the way we bought property was get Saturday’s paper, I look at what properties were listed for open home, and then spend a few hours driving around and going through things. We can still do that, of course, but you’re really narrowing your focus and you’re not taking advantage of technology.
Just to put some context around how important technology is to Propertyology’s business, in the 2016 calendar year, Kevin, we bought roughly a hundred properties and none of those were in our own home city of Brisbane – none – and 95% of the clients who we bought those properties for lived in Brisbane either.
Kevin: You’re looking at properties all over Australia. I know you look at a lot of regional areas as well. As the person who’s guiding a lot of other people as to where they should be buying it, at what point do you get your feet on the ground, Simon?
Simon: It’s a big-picture analysis from our office here in Brisbane. We see Australia as a property market in a similar way a share investor has a massive stock exchange. They don’t narrow their focus to companies that have a head office in the city they happen to live in themselves.
We have a very similar way of analyzing that, and that’s a lot of economic data, property data, infrastructure projects, what different industries are doing, and that sort of thing. Several times throughout a year, we’ll give a location a green light. That’s using technology to gather information and interpret information, and then we physically fly to whichever town or city that is, whether it’s a capital city or a regional city.
We will live there for a week, we’ll meet face-to-face with mayors, with town planners, economic development managers, we drive down every street, so we’re gathering a lot more information then at a local level. We’re plotting all this, and then back in their home city of Brisbane, we can pinpoint an individual property on a specific street and make sure we buy it at the right price.
We could do none of that if there wasn’t for technology.
Kevin: How often are you reassessing this data? Is it an ongoing exercise, Simon?
Simon: It is. Researching market is our core business. The average person who might buy an investment property will do that process once every seven or eight years, at best. It’s our profession; we’re doing it every day.
You’re right earlier what you said, Kevin, about there being so much information on the Internet, but there’s a big difference between jumping on the Internet for a couple of hours and reading a whole heap of articles about property and actually researching.
How do you know whether the quality of the content is [4:02 inaudible] or whether there is a vested interest in a particular comment that’s been made? And what don’t you know? What was it in the article that you haven’t heard of yet?
It’s a big wide world, the Internet, but you need to know what’s the really important information and where to get it from.
Kevin: What are you reading into the data that you are picking up on and that you’re analyzing in terms of the regional areas compared to the city areas, say, in the next 12 months or so, Simon?
Simon: It depends which sort of data we’re looking at. There’s the property-specific data, which is what we refer to as “rear-vision mirror” stuff – changes in median property values, for example, or vacancy rates. That’s interesting but it’s behind us, so it’s “rear-vision mirror” stuff.
There’s the economic data, which is often a precursor to what a property market might do next. So, whether it’s regions or capitals or cities, we have a keen interest in things like growth in jobs, growth in wages, and what’s in the housing supply pipeline. A market might be undersupplied or in equilibrium now, but there might be a lot of extra approvals in a market that technology gives us some insight as to how that city might look in years to come, so it could be an oversupply.
Information comes in all different sources. It’s not always data; there is information which might be in a government report or an industry body’s report that’s describing something that could be good or bad for that market in years to come.
Kevin: Simon, great talking to you, mate. Simon is a regular guest on our show. You’ll hear him from time to time. He even gives us some good insights as to what areas he’s currently looking at as well. Propertyology.com.au.
Simon, once again, just in closing out, congratulations on being named as the Queensland finalist in the 2017 Telstra Business Awards. All the best. We’ll watch that, and we’ll talk to you when you win it.
Simon: We’re one of five, so we’re a 20% chance. But there’s something like 425,000 businesses in Queensland, so we consider it a win to be coming this far. Thank you for the comment.
Kevin: Excellent, mate. Congratulations and we’ll talk to you again soon. Thanks, Simon.
Simon: Good on you. Thanks, Kevin.