Property investor and buyers agent Joe Tucker says investors can effectively build their knowledge by connecting with online groups and talking to the right experts.
Property investment should never be a solo journey, especially when it comes to property education. And while there is a huge range of resources easily available, nothing beats networking and knowledge-sharing.
That’s the experience of Joe Tucker, the Director and Head Of Research at Property Principles Buyers Agency. Joe recently joined Bushy Martin on the Get Invested podcast to reveal how to find the best experts and networking groups.
Screening the property experts you engage with
While reaching out to the professionals is certainly useful, Joe emphasised you need to do your due diligence first.
“When I was starting my property investing journey, I went to the big guys. I went to the guy that had the real cool suit, the real sleek haircut. He had the (social) following and all of that stuff, and paid hundreds of thousands of dollars in marketing. And I got sold a lemon. And that’s what you get for not doing the due diligence on the experts that you’re working with,” Joe said.
When it comes to buyers agents, there are several questions you can ask to determine their credibility.
“The main questions are around incentives. So you can ask are, ‘how are you getting paid? Are you getting a fixed fee from me?'” Joe said.
“It’s also about understanding what kind of kickbacks they get from brokers and other professionals like conveyancers, or do they get referral fees from real estate agents? So those type of questions, and understanding where they’re getting their money from, is really important.”
Finding the right buyers agent using FAB
One of the main ways you can separate a great buyers agent from an ‘average’ one is through FAB – Fundamentals, Analysis and Boots on the ground.
“So we have this thing called the FAB of property investing. So the fundamentals, or ‘F’, are the drivers of demand, which are population, projects, employment and desirability. So when you have these, and you minus the supply of stock that’s coming on the market, you can get a good fundamental understanding of that area,” Joe explained.
“And then that leads to ‘A’, which is analysis. This is more of your data and that hard science stuff. Are the listing volumes going down? What are the type of yields that we’re getting here? Is there a good renter proportion? What type of vendor discountings are there? What kind of inventory? Now, a lot of buyer’s agents in the industry I see focus a lot on this analysis and data. And don’t get me wrong, selecting the location is one of the most important things, but that’s where you need the ‘boots on the ground’ and to actually go to that location.
“So early on when we were looking in Victoria, I did a massive road trip and we spent a whole week driving around. Data wise, this place looked unreal. I did all the analysis and it had all the supply and demand drivers and all of that looked really good. But when I got there, I didn’t feel good. I didn’t think this is a place that I would like to live in, and there were a lot of ‘not spots’. So hotspots are the places to go, but a not spot is a place you definitely don’t want to go. And by getting boots on the ground, it made me realise that this is not a market I want to be buying in. And we crossed it off the list.
“So I think this is one of the key points – if you are going to use a buyer’s agent, when was the last time that they were in that location, and have they identified where the hot spots are and where the not spots are as well?”
The benefits of online networks for property investing
Joining groups on social media and forums with like-minded individuals from all walks of life can provide useful insights, especially if you’re early in your property investment journey. These type of groups can also create a safe environment that is free of judgement.
This is why Joe created his Facebook group Aus Property Investors on Facebook, a fast growing community of more than 26,000 investors.
“So we were wanting a place to write down what we’re doing and how we’re going about it. And we just decided to jump onto Facebook and create a group,” he said.
“It’s a really good community. It’s truly focussed on sharing good quality information so that people can educate themselves and have guidance in their own journeys. It’s getting beyond the head knowledge and going into what actually happens on the ground.
“It’s also creates that sort of circle of safety, because quite often people are not prepared to ask questions because they’re scared of what’s going to come back at them. But a group like this creates a safe place where they can do that.”
Having the confidence to ask questions
Once you’ve found your perfect buyers agent and support network, don’t be afraid to ask questions. From Bushy’s perspective, “the dumbest question is the one you don’t ask”.
“Luck is preparation multiplied by opportunity. And the more you work at something, the more you learn about property, the more education that you take on, the better that you will get,” Joe said.
“Ask those silly questions. Jump in from anywhere and just throw out what you’re actually thinking, because someone else is thinking the exact same thing and it’s the only way to learn. So be comfortable asking silly questions and don’t pretend to be the smartest person in the room because you’re not going to learn that way.”