Do women make better property investors than men?
Feb 02, 2018
When it comes to property, men have a higher tendency to gamble and are more easily manipulated while women are usually extra cautious, seeking low-risk and long-term sustainable capital growth.
And selling to a man can sometimes be as easy as having a pretty face, according to agents.
In fact, research undertaken by RiskWise Property Research shows men are tempted by 'get rich quick' schemes and marketing ploys, while women look for long-term performance.
The research reveals surprising insights into the mindsets and motivations of female and male investors.
Typically, RiskWise's research revolves around macro-economic trends and key growth data. However, when recent studies revealed women are 'better' Wall Street investors than men, RiskWise wondered if the same held true in real estate?
Men are more easily manipulated
Property marketers often use enticement by appealing to men's visual senses. For example, it's common practice for female models to be hired to stand beside professional sales people at property expos.
A study of real estate agents who hired models in the past several years is revealing. Typically, the models increased the traffic to their booth by 50 to 100 per cent, with a similar increase in the rate of high-quality sales leads, many of which converted into transactions.
It was noted by these agents that even a short absence of the model resulted in an immediate and significant decrease in traffic to their booth.
One of the presenters commented, "you can sell anything to men - you just need a beautiful model who lures them in, has some small talk with them, and our polished sales people take it from there all the way till they close the deal".
In addition, free educational seminars are designed by real estate spruikers to sell off-the-plan, and often low performing, new properties. Many of them are high on the RiskWise 'off-the-plan Danger Zones' list.
Women are more likely to recognise that they are not the client at a free seminar and, in fact, the seminar organiser likely works for a property developer and has a contractual obligation to sell the properties for the highest possible price.
Men, on the other hand, are more likely to be swept up in the hype and believe they are the client, and that the organiser of the free seminar will truly act in their best interests.
Are women really better property investors than men? And if so, why?
RiskWise research shows women are more aware of risks and seek tools to manage it; men tend to ignore the risks.
In fact, 58 per cent of its website traffic is generated by women - in particular, professional women between the ages of 25 to 44. This is particularly interesting because it fits the rising trend of young women taking more control of their financial future through real estate.
Women's interest in risk and mitigation strategies is 38 per cent higher than men. In fact, studies have shown men are overconfident and have a higher tendency to gamble. This is a concern in the property market, where high-risk ventures can have devastating consequences.
Women search for low risk and long-term sustainable capital growth; men are more likely to invest in a 'hot spots' and 'get rich quick schemes'.
To understand the differences in decision-making processes, RiskWise researched 'hot spot' investments which historically have been shown to be a poor investment strategy.
Data was collected from the property professionals who facilitated hundreds of investment transactions in Queensland's booming mining towns in 2011 and 2012. Many of these properties have since busted with the industry downturn. The data confirmed that the vast majority of the decision-makers in these 'hot spot' investments were men.
One professional commented that "in 2012 men were significantly more likely to think that an investment in a mining town in central Queensland was a better investment than units in the middle ring of Sydney".
Women check the facts, men can be easily swayed by opinion
Being generally more risk-averse, women validate any property information they receive with an external and independent source.
Men are more inclined to search for validation of a pre-conceived idea. Even when presented with formal research, complete with data and analysis which clearly reveals the risks, men have a tendency to brush aside facts.
The final analysis: why women make better property investors than men
A successful investor is one who follows a strategic process and backs up action with independent research. Women have a natural tendency to operate in this fashion, which protects them from high risk and increases their chances of investing with long-term success.
The risk of failure increases when the decision-making process is driven by flashy advertising or big numbers. Men, by nature, are more likely to follow a gut feeling rather than facts and research. As a result, men are in greater danger of being lured in by industry hype and 'sure bets' than women are.
RiskWise Property Research was formed in 2016 with the goal of providing property risk advise and research services to help its clients make informed purchasing decisions. Its goal is to provide private investors, home buyers, property professionals and institutional clients with detailed risk information to support smarter decision making. Its vision is to be a global leader in property risk rating and research helping its clients to achieve deeper risk insights so they can make smarter property investment decisions.
To organise an interview with RiskWise CEO Doron Peleg please contact:
0421 057 129