29 Jan DIY property research tool – Ben Kingsley
No longer does desktop property investment research have to be hit and miss. Location Score is a program that identifies and classifies every property in Australia and we tell you how to get it.
Kevin: Ben Kingsley joins me. Ben is the CEO and founder of Empower Wealth. I want to tell you about a program that we’re supporting and I’d suggest you have a look at. It’s called LocationScore.
Ben, firstly, welcome to the show, and thank you very much for giving us the opportunity to talk about this. Tell us about LocationScore. How did it come about, and how does it work?
Ben: Thanks for having me on. LocationScore is a passion project that is really driven by getting better research out there for people who want to do it themselves. Yes, Empower Wealth helps people who want professional advice, but there are a lot of DIYers out there, and we’re really worried about the types of asset selections and the locations in which they are buying. Ultimately, property is a high value transaction, so it’s really important that you pick the best location to buy in.
Jeremy Sheppard had developed an algorithm that measures the demand and supply ratio, and we’ve put that together and created LocationScore to help people work out where there is high demand and low supply – because ultimately, that leads to capital growth, and at the end of the day, that’s what we’re looking to invest in. We want to get a return on our investment.
Effectively, what we’re doing is measuring some of these key variables, eight variables about how we can measure those demand and supply stories, and we put them into a score so that it’s really easy for people to put all this together and then find out the best location.
Kevin: In LocationScore, when you go in and you score a particular area, how defined is it? And is there some guide in there to say “This is worthwhile having a look at”?
Ben: It’s a massive timesaver, because ultimately, let’s have a look at some of the sort of things we’re measuring. We’re measuring things like days on market, stock on market, average vendor discount, vacancy rates. We’re measuring these eight key indicators, and we put a weighting on each of those and collaborate that into an algorithm that gives us that final score.
So, we’ve done all the heavy lifting across 16,000 suburbs in Australia. Because we can sit there for hours. People do search, they look around; that’s not research. What this is doing is basically pointing you into the right suburb location for where you should then start to do your field research.
It’s a great way of saving time and knowing that you’re buying in an area where there is really good demand, which means that we have potentially short-term capital growth, that one- to three-year capital growth window that we’re trying to look for.
Kevin: How up to date is the information? Anything like this is only ever as good as the accuracy of the information behind it.
Ben: Each month, we gather literally millions of data points right across Australia. The latest data is the December data, but every month, we release the new data, usually around the 10th of the following month. Now it’s January; we have the December data there.
So, this is using a lot of information, a lot of data-mining in trying to get that information, data that we’ve purchased as well. And we’re putting all that together and coming up with a score for every suburb, for both houses and units, because one of the other things, too, is we know is that units can sometimes have over-supply but houses in that particular suburb might be absolutely worth buying into. So, it is also about breaking that down between houses and units.
Kevin: It’s the starting point, I guess, for any research, isn’t it? If you want to know about a particular area, then you can drill down even further once you’ve decided on the area that has the most promise, Ben. Is that how it works?
Ben: Yes, Kevin, I think you’ve nailed it. For us, it really is all about cutting down a lot of those research hours and trying to then identify those suburbs. It’s really easy to use, because we do two things. We have basically a filter which gives you the top list of suburbs in the different states, in the different cities, so that’s ranking suburbs inside those areas, and then you can also search for every suburb in Australia. So, two very simple means.
And there’s this gauge that says, “Danger, caution, maybe, good, or excellent.” The higher the score, usually the better the suburb that you’re buying in.
Kevin: Okay. Crunch time. What’s the price? How much does it cost?
Ben: We’ve made it very, very affordable. You can buy it for a week for $47. Then you can go into maybe the overall subscription for three months, which is $97. So, it’s really cheap to be able to get into getting some good research and having all of those numbers crunched and refining that into a score.
Now, when you run the numbers, you also get a breakdown of each of those variables, so you’ll actually see a chart of each one of those variables trending over time. You see the overall score, but then you’ll see the breakdown in terms of auction clearance rates, days on market, stock on market, and there are a lot of educational videos on the site that will help explain what each one of those do to the overall property value.
Kevin: Okay, so if you’d like to learn a little bit more about it, I recommend that you go and have a look. Use the link on the homepage at Real Estate Talk; that’ll take you directly into the site and will give you all the information. So, just use the link on Real Estate Talk, or watch out, we’ll be sending out some mailers about this as well. It’s a great tool, it’s called LocationScore, and you can get all the details by using the link here at Real Estate Talk.
Ben Kingsley, congratulations to you and the team there for all the work that you’ve done on putting this together, and I wish you every success.
Ben: Thanks very much, Kevin. We appreciate it.