How property misinformation can cloud investors’ vision

According to three experienced investors, property is a “hotbed of misinformation”. So, how do you know who to trust?

victor kumar steve waters right property group spi pjoypa

In a recent episode of Property Investing Insights, Smart Property Investment’s Phil Tarrant sits down with Right Property Group’s Victor Kumar and Steve Waters to unpack the most rampant rumours in the property world.

For these three investors, misinformation is more than just a buzzword they know that wrong information can kill a promising investment. But when property misinformation saturates so much of popular media, finding a source of authority you can rely on can be a challenge.

As Phil has observed, sources of property misinformation can be either “analogue or digital”. An investor’s online sources may be shaped by the media they consume, but their property knowledge is equally shaped by their real-life algorithm: the people they spend time with face to face.

Phil comments that whether you spend time in “inner city Sydney drinking fancy cocktails”, or whether you spend time speaking with property investors, these interactions will shape “the sphere of influence you have around you giving you information”.

When it comes to property, the trio note that this ubiquity of opinion can pose a problem because real authority takes time to develop.

The property advice dished out by people in your sphere of influence may sound seductive, but these people “might not actually have the scar tissue required to actually have good authority,” Phil cautions.

Most significantly, Victor and Steve warn that most people lack the resources to correctly interpret market data.

Rumours of vacant “ghost properties” abound, but Steve suggests that these rumours are based on “misleading data”.

Steve gives the example of one metropolitan suburb that appeared to have 14 properties on the market. “But when you dig deeper, out of those 14 properties, 12 are under contract,” Steve said.

In reality, only two properties were vacant in that suburb – but without analysing the data correctly, this number could appear seven times larger.

While inaccurate data is not a recent phenomenon, the three investors warn that misleading data like this is far quicker to propagate due to the “speed in transition of information now”.

According to Victor, social media traffics in clickbait data that will garner the most “likes and shares on Facebook”. It does not linger on “the not-so-sensational, the slow-moving, better properties that will perform over a period of time”.

For steady, reliable property advice, the trio advise investors to select their A-team carefully.

“Be careful out there,” Phil warns. “The best authority comes in shaping your own direction and future.”

Listen to the full conversation with Right Property Group here.

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