Risk or reward? Ask yourself who the real property 'experts' are
Mar 25, 2018
There are a lot of ‘property experts’ out there, all with opinions on the worst areas to buy, the best areas to purchase, the hotspots and the icy-cold danger zones.
It’s an absolute minefield of what ifs and where tos. Just who do you listen to?
Donald R. Gannon once said “Where facts are few, experts are many”, and it is a sentiment that should be taken into account when it comes to property investment.
RiskWise believes that many ‘experts’ fail to use enough macro-economic factors, data analysis and most importantly, a property risk-assessment process, to reliably determine the best areas in which to buy or, for that matter, avoid.
This is evidenced by data which shows one in four so-called 'Hotspots' deliver negative capital growth over the medium term of three and five years, with only a third outperforming the market benchmark.
Our research regarding 2011, 2012 and 2014 Hotspots has shown the current approach is fundamentally flawed with a staggering two-thirds named on the lists having underperformed the market.
Even worse, close to a quarter of property ‘hotspots’, rather than delivering for investors, incur negative capital growth.
That’s a scary amount of ‘expert’ advise that not only didn’t hit the mark but was a million miles off target.
RiskWise takes an alternative approach examining and analysing both the risks and macro-economics.
The research house uses an innovative algorithm that allows buyers to glimpse the long-term risk-or-reward of a property.
The analysis is unbiased and entirely independent meaning, unlike some property ‘professionals’, there is no agenda to spruik one area over another. The data is all fact driven with no ‘deals’ done behind closed doors.
Its reports cover a variety of factors including location, suburb, population and economic trends, rental returns, property type comparisons and even capital growth forecasts for the long and the short-term, for any region or property in Australia.
It also measures current and historical data and dozens of variables against a broad range of risk factors, ultimately scoring the property’s risk rating from minimal to high.
Because it is so comprehensive, it means nothing is left to chance and there is no danger of having ‘too few facts’ on which to base the analysis.
And this means it’s simple for investors to avoid properties that send up red flags.
RiskWise Property Research CEO Doron Peleg says reports - which are available on an individual property, a development, a suburb, an area or a state - give buyers the chance to look through the comprehensive advice given to them and see the genuine figures and numbers on paper from a risk-based perspective.
“The new insight provided by these reports is revolutionising the way we assess risk on properties, the due diligence process and ultimately, our buying behaviour,” he says.
“With all this new analysis technology, Australian investors now find themselves in a stronger position – one where the power of knowledge and risk management is finally in their own hands.”