Five online investor resources to help find your first property: Cameron McEvoy

Those new to property investment are likely to be in a ‘discovery’ phase of planning, data, and research tools. These tools are important because they make an investor’s life much more time efficient, enabling them to move more quickly with property buying decisions.

Most new investors will have a basic knowledge of the main data sources for property searches and information, such as Realestate.com.au and Domain.com.au, but these are only the tip of a very large data iceberg.

With James Packers recent part-share acquisition of US property research and buying site Zillow.com, it is great to see some similarly sophisticated tools become available in the Australian market. The best tools use data from multiple sources, as well as an innovative perspective, to allow investors to glean valuable insights for their planning decisions.

Here are some great tools I've identified that should aid investors in their due diligence phase and to minimise risk of suffering from the dreaded ‘analysis paralysis’ that many new investors experience.

1) Next For Sale:

I’ve placed this site first because it is new into the market and offers something that many of the other online property listings sites do not.

Next For Sale is effectively a free service that enables property buyers and sellers to get a sneak peek of properties that might be listed for sale yet – but have not been formally placed on the market:

-          Owners can use the service before they officially list their property for sale, to identify if there is any pre-existing market interest in their property, before any formal sales marketing tactics begin. By identifying whether there is high or low pre-existing market interest, owners can set a better or more realistic sales price (or a better reserve price for auction), which in turn could make for a faster sale.

-          Home buyers can also use the service to keep tabs on properties they may be interested in, but are not yet officially on the market for sale. This is a useful tool for home buyers because it allows buyers to identify homes that fit their criteria, outside of the stock that is offered to them by agents.

From an investor perspective, the tool also has great benefits. Home buyers are very much motivated by lifestyle factors in their need to seek a home and this translates to a more speedy property buying process. Factors such as a coming marriage, baby, an expiring lease, a low-rate mortgage environment, or sudden changes like death and divorce, are what drive most home purchases.

Investors, however, bide their time, most of the time! Smart investors know to sit pretty and wait until the right property comes along, before purchasing for as an investment. So a tool like Next For Sale enables investors to identify street patterns within their chosen suburbs, to get an understanding of where latent buyer demand is. This is great because it means where there is home owner demand, rental popularity follows.

The tool could then effectively be used to spy on a micro (street-specific) market within a suburb, and pounce only when the time is right. And when that time comes; you can create a dialogue with owners before any formal sales marketing process begins.

2) Property Value:

This is an RP Data product/service and works on a paid model. The site offers a great variety of tools that allow customers to access detailed financial and historical data about a property, in relation to neighbouring properties. The services the site offers include:

-          Street reports, allowing users to access the actual sales price each property in their target street achieved, over a specific historical time period

-          Suburb reports allow for the above street-level data, but for an entire suburb. These reports are more expensive but provide great intel behind an entire suburb

-          Professional services, which is effectively access to a network of industry professionals such as valuers, agents, pest/pool inspectors, finance and mortgage brokers and so on

These tools are valuable to investors starting out; as well as experienced investors who do not have enough due diligence data on a new suburb they might want to expand their portfolio with, by buying into.

3) On The House:

This service is probably the closest Australian-based tool to Zillow.com that we have. It enables users to look up specific suburbs, streets, or even properties, to identify any known sales history. The site uses data tools that plug in to provide known historical sales value data. Where it does not know the actual sale price, it speculates based on relatable data what the last sale price may have been. It also offers insights for the rental market, and connects users with local real estate agents close to the property or street in question.

The site is free to join and the granularity of data you receive with a free membership is substantial. Investors could use this resource to:

-          Form a view of a street or suburb in terms of the likely buy-rate they’d be willing to pay for specific property types

-          Assess the rental return achievable in a suburb based on data revealing the actual rents paid on leases. Though the main players Domain.com.au and RealEstate.com.au can be used in a similar way to identify rental return likelihood; OnTheHouse allows you to drill down superficially to ‘rental history’ only, allowing a full view of actual rents paid, not rent rates advertised. This is important as rental application ‘bidders’ can inflate the actual weekly rent rate, so the OnTheHouse data picks up on this.

4) Real Estate View:

This site works similarly to RealEstate.com.au and Domain.com.au; being driven largely by property rental and sales listings. There are two key differentiators with Real Estate View, however:

-          Where most sellers (whether directly or via their real estate agent) tend to pay for listings with just Real Estate/REA Group and Domain.com.au, Real Estate View offers investors and home buyers potentially a fresh group of property listings that may not be listed with the two main players. It is like assessing the supermarket industry, where two major players (Coles and Woolworths) effectively dominate the industry, but other players such as Aldi and IGA also have solid product offerings.

-          The other benefit for investors is the ‘expert view’ editorial approach to the site. Where news stories and data on Domain and Real Estate are often generic, light, and not specific to precise topic areas within the gamut of property buying, Real Estate View brings highly credible industry professionals, working across a variety of key topic areas such as finance, mortgages, search strategies, renovation, tax, growth strategies, moving house, and market intelligence (data plugins).

5) Mortgage Calculator Tools

These tools really are a dime a dozen; with virtually every major and minor bank – as well as non-bank institutions like credit unions and mortgage brokerage houses – are offering to the market. There are different types of calculators on offer, and all are free to play around with:

-          Maximum lending calculators – uses your personal financial and lifestyle data to work out the maximum loan amount you’d qualify for (approximation only), with a given lender.

-          Loan repayment calculators – easily the most valuable to a would-be investor, these allow you to track the feasibility of committing to a loan for an investment property over time.

Though they are very common and all function very similarly, it would be most efficient as a time-poor investor to begin with using or speaking directly to a mortgage broker. The reason being is that running these tools against several individual banks will produce differing results, and take a lot of your time, to do.

The more efficient way to do it is to have a broker run your personal details and financial data, against dozens of prospective lenders, at the same time. This will enable you to shortlist lenders most suited to you, and also to assess lenders based on their product offerings and not just their competitive rates alone.