How to use data to succeed in property investing

Property investor and educator PK Gupta says data-driven education will make a massive impact on your property investing strategy.

For PK, any time is a good time to get started in property investing, as long as you have the right data, education, strategy and network to guide you.

On Property Hub’s Get Invested podcast, he talked about how investors can take control and research, source and negotiate quality properties.

Building your own property strategy

Before researching an analysing any property data, it’s important to set up the right strategy.

“We had a client who built his own strategy using the tools and methodology we provided. Now his strategy is different from my strategy and your strategy. He has a different income, different serviceability and risk profile. For example, he didn’t want to be active, he wanted to be completely passive. So he built his own strategy,” PK said.

“And it’s not like he just put down a few bullet points on a piece of paper. He actually used the financial models that we provide and built out a cohesive strategy. He had a number of properties, the frequency, the serviceability, this is how he could do it. And he was confident in this foundation.”

Identifying a location

While it’s always a good time to invest in property, the question is, where and how should you do it? That’s where data-driven research becomes key to identifying the right location in Australia, whether it’s local or interstate.

“If you talked about a property boom at the start of 2021 in Sydney, people in Perth would have been like, what? What boom? Where are you guys talking about? So the whole point is that there’s different cycles. Every market, every city, every suburb has its own cycle,” PK said.

“And so yes, we should be afraid of investing if we don’t know what we’re doing. If you are just following someone blindly or if your friends made money in the boom over the last two years and you have buy just because you have FOMO, well don’t do that and keep your money in your own pocket. But if you actually know what you’re doing, it’s always a good time to buy. You see I’m a big believer of timing the market and time in the market. I think both are important.”

Using the right data methodology will often help investors identify the right suburb for their strategy.

“In 2020, our client had identified a suburb, Pacific Pines in the Gold Coast, using the data methodology we teach. And so he selected the suburb completely remotely by having confidence in the data. Then he used data, plus local property managers, to find the right pockets and the right street in Pacific Pines,” he said.

Selecting quality property regardless of median prices

PK and Bushy highlighted one figure which shouldn’t be too influential on your decision-making – the median price of a location. The duo explained how quality properties will trump what the median prices seemingly indicate.

“There is a place called Sorrento in the Gold Coast, and there are almost like three markets within the suburb there. There are properties on the waterfront or on the canal, and then there are properties on more the main road area, and then there are properties that aren’t on the main road but not on the canal either. And you find that, despite Gold Coast property prices dropping, these waterfront properties have actually gone up, whereas the main road properties have gone down 25%, and the ones in the middle are somewhere in the middle. And it’s all within the same suburb. So I could bundle Sorrento and tell you that the median has gone down, but it’s like hey, if I want to sell my house on the waterfront today, I’d get more than a year ago,” PK said.

Bushy added: “I get very frustrated with a lot of commentators who talk about property markets, which in my view don’t exist because every property, in every street, in every area is different from the other. There’s no apples to apples comparisons. And then there’s a total reliance on median prices, which again, don’t tell a true story, because if you’ve got a quality property in a quality location, the median price means nothing.”

“Quality always outperforms. And as long as you know what quality is when it comes to property, and then you you can create your own economy within property by just focusing on property, regardless of what’s happening with market movements. If you’re making sure that it’s an investment grade property with owner occupier appeal, so that you’re making sure that you’re appealing to the broad buyer market, then those properties are always going to do well and there’s plenty of evidence of that.”

Having confidence in your property investing journey

These data-driven actions and investing approaches won’t work without having the confidence to work both independently and with a trusted support team.

“We had a client named Bennett who knew nothing about property before approaching us. But I was really proud of how he was willing to go outside his comfort zone. He was willing to pick up the phone. He was willing to trust the data and test it to make sure that it was legit. He was willing to lean on the team around him. I mean, he didn’t even catch a flight up to the Gold Coast. The building and pest inspectors and the property manager did all the due diligence for him, and it’s just happy days since then,” PK said.

“So anyone can do this, like you don’t actually need to do my course and you don’t need a buyer’s agent. If you have the wherewithal with data, you can pick up the phone and talk to local property managers. You can buy, anywhere around Australia, high growth, high yield properties.

“But at the same time, it’s always good to have help. To use a fishing analogy – I find that some people, if you give them all the tools and all the knowledge they have, they’ll hook the fish and start reeling it in. But if it’s a really big fish, sometimes they just need an extra pair of hands on that fishing rod to just help pull it in. And that helps them with the confidence, just that extra assurance that they’re doing the right thing. And then you just get that fish over on top of the platform of the jetty, and you can let go of the fishing rod and they’ll say, wow I did this myself. So it’s a good feeling.”

Listen to the full interview here.

Want to Know How you can build wealth with the help of leading, qualified experts? Check us out and talk to the team, now.

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