I’m sure you’ve heard – data is the new currency. It’s the next big thing for business and it will be a catalyst for driving the world forward over the next few years. Learning how to harness the power of data in property investing, will be a secret weapon all investors can use to create more wealth.
So, what is data? It’s information, insights and predictions that property investors can use to help them make smart property purchases.
This could be data around what’s happening in regions in terms of infrastructure and growth. Figures on what type of property is selling well in a particular location. Information on industry or employment opportunities in a city or regional town.
All of this kind of data can give property investors an edge into what, where and when to purchase in order to create wealth.
However, when it comes to data and information, property investors face some challenges. Identifying what these can be will help protect you from making decisions based on fiction and distinguish what is fact.
CHALLENGE #1: DATA ISN’T GOOD OR BAD – IT’S JUST INFORMATION
Letting go of the idea that data has to fall into a good or bad category is a big learning curve for those new to real estate investment.
Remember data is just information coming from different sources. Take it in, and use it as part of a whole knowledge bank you have stored in your mind that will help you gain a greater understanding of the market and investment process as a whole.
In short, don’t give it too much meaning. A report on rises or falls in the market is just one piece of the data puzzle, not the whole picture.
CHALLENGE #2: NOT ALL SOURCES ARE EQUAL
While we’ve been socialised to respect institutions like banks, insurance companies and even some forms of media, most of the sources of data and information aren’t objective.
In simple terms, everyone has an agenda to suit their own purposes and success strategy. While your agenda as a property investor is to eventually pay your loans down and create positive cash flow from your properties, the bank’s agenda is the opposite. Why would they benefit from you paying off your loan?
And even the most well-respected business or finance media has to attract readers, and nothing does that better than a scary headline.
Sources will put data into the market to support their own agendas, another good reason to resist attaching too much meaning to any one piece of information.
CHALLENGE #3: MOST DATA SOURCES HAVE LITTLE RISK
If a financial planner told their clients that property prices were going to plummet by 50 per cent and the smart thing to do was to sell all of their properties, and they were wrong, their clients could sue them.
If the banks, lenders or media say the same thing, they have no tangible responsibility to how people react to that information. So, while the information may have been put in the public arena with the best intentions, if it’s wrong, there’s no fallout for the source.
The challenge here is to once again take all data as small insights into what is a very big business with a lot of moving parts. Don’t be scared into an over-reaction, or worse yet a paralysis of any decision making, by one piece of data.
Smart property investors seek information from property experts with years of experience and education who, incidentally, have the same agenda as them – to use property as a way to create wealth.
MAKE DATA DRIVEN DECISIONS CORRECTLY
The key here is to make data driven decisions correctly. When you can read verified information accurately, it has the potential to help you tremendously.
It can inform much if your investing strategy and lead you to the best properties to buy, in right locations and for the right place. It can guide you in making key decisions such as which property manager to go with, what rent to charge and even which banks to work with.
To learn more about how you can better utilise data when investing in real estate, join us for our free property investing seminar.
Limited spots are available so book here now.