Why Good Information Is the Heart and Soul of Property Investing

Everybody knows that the property market can be difficult to predict. Not everybody knows that good property investing is all about good quality information. The fact is that property investment is really a business operation. Like a business, how and where you source your information is the key to success. In the property market the difference between good information and bad information is a major quality control for your investments.

The Value of Information When Investing in Property

If there was ever a case of information being literally the heart and soul of an industry, that industry is the property market.

This is why good information is so important:

  • Not all properties are equal- Some properties are real gems, some are just that bit too ordinary to be worth your time, others are deadly liabilities. You need to know how to assess an investment property and how to get the information you need to get an accurate value for an asset.
  • Returns on investments vary enormously between properties- The percentile dollar value of returns may not even be the same for two identical houses right next door to each other. The difference is the information related to the different properties as property investments.
  • The property market can literally turn on a dime- There are three basic forms of the property market- Up, down and stagnant. Boom markets can slow, dead markets can roar back to life, and stagnant markets can feel like they go on forever, particularly if you’re trying to sell. You must have enough good information to read the market correctly.

Sourcing Your Investment Information

There are two types of information available in the property market-

  • Industry media and property market news- This tends to be more sales-oriented. While the sales information is usually fairly accurate, it’s also short term. It may not be appropriate for your investment strategies, and it’s also information which is geared to selling.
  • Statistical data and research materials- This information doesn’t come directly from the market. It’s analytical data, and it’s derived at a degree of remove from the vested interests trying to sell properties. You can learn how to find this information and how to use it when you get professional property investment advice.

The difference in the relative values of the different types of information is literally chalk and cheese. For property investors, it’s actually financial information.

For example, look at a basic piece of factual, widely-disseminated market information: The average increase in value of a residential property in Australia over the last 20 years is 8%.

Now interpret this information:

Does this fact mean the Australian property market went up smoothly by 8% nationwide for 20 years and that every property in the country could be simply upvalued 8% every year? Of course not. It’s accurate information as far as it goes, but in terms of actual property prices, it’s also almost irrelevant when you’re looking for an investment.

The best way to invest in the property market is to start by making sure you get good information and know how to use it when you’re investing in property. Do yourself a huge favour- Check out professional property investment advisory services before you even think about buying your next investment property. You’ll be very glad you did.

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