Property Hub - Investment Insights & Inspiration - Realty Talk: Misleading Medians + 3D Printed Homes + F.A.B. Property

Episode Date: October 28, 2022

Are median prices an appropriate metric to make informed property decisions? Kent Lardner from Suburbtrends discusses this and opens our eyes to more useful measures. Building a new home has become very risky and expensive due to cost and time blowouts. The answer? 3D Print your home! Ahmed Mahil joins us in the first of a 2 part feature to reveal this housing solution revolution. How do you combine the best data with local knowledge to secure the best borderless property? Joe Tucker from Property Principles Buyers Agency joins us to unpack his unique property F.A.B. approach.   RealtyTalk is part of the Property Hub podcast channel, your home for property investment insights, inspiration, and stories from Australia’s top property experts, investors, leaders, and analysts. Subscribe now to get every RealtyTalk episode delivered to you each week for free, and also get full access to Get Invested, the leading podcast for Australians who want to unlock their full ‘self, health, and wealth’ potential and get inspired by the stories of investors, founders, and entrepreneurs. Subscribe to RealtyTalk on the Property Hub channel: Apple Podcasts | Spotify | Google Podcasts | Email Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media.  Business and partnership enquiries: [e-mail]  See omnystudio.com/listener for privacy information.

Welcome to Realty Talk, the show that brings together the country's most authoritative and respected property experts. Follow us on all the socials and subscribe for updates and exclusive offers. Realty Talk is powered by Realty.com.au, connecting buyers, sellers and agents differently. Greetings and welcome to Realty Talk, which is now proudly a part of the new and expanded Property Hub, your home for property investment insights, inspiration and stories. from Australia's top property experts, investors, leaders and analysts in collaboration with Apiro Marketing and DM Media, Australia's largest independent podcast network. I'm Bushy Martin from Nighthow Property Finance and this week we've got more great property

innovations to share. To kick things off, leading property analyst Kent Lardin joins us to unpack the dangers of medium price metrics and reveals better measures to help you make much better informed property decisions. Now, in the current market, building a new home has become very risky and expensive due to extensive cost and time blowouts. So what's the answer? Well, 3D print your home, of course. Now, to rebuild this housing solution revolution, industry innovator Ahmed Mahil from Leighton joins us in the first of a two-part special feature.

And if you're a follower of Realty Talk, you'll know that we're big supporters of good buyers agents to help you secure the best borderless properties right across the country. But in our experience, a lot of buyers agents are either great with desktop data and average with local knowledge, or they have intimate local awareness, but can't quantify why an area or a property is going to outperform. So what's the answer? Well, Joe Tucker from Property Principles Buyers Agents and co-founder of the hugely successful Oz Property Investors Forum joins us to unpack his unique fab formula to conclude

the show. Now, before we get into it, make sure you don't miss another episode of Realty Talk by subscribing to Property Hub on your favourite podcast player, where you'll get two powerful episodes of Realty Talk, as well as the Get Invested podcast delivered to you each and every week. And make sure that you also sign up on the realty.com.au homepage, where you'll also get a free copy of my award-winning book, Get Invested, just for making the effort. We've got a heap of innovations to reveal, so let's get on with the show. Hi and welcome. Now, for some time now, we've been opening our eyes to the pitfalls of a

mainstream media's fear-driven obsession with national and state-based property markets that actually don't exist, along with a reliance on aggregated median property prices that are at best misleading and at worst downright dangerous. Because as we know, the devil's always in the local detail when it comes to property condition trends. So where do you turn and what property information do you actually need to access in order to make better informed property decisions based on more relevant and more useful data. Well, to discuss this, we're joined by one of Australia's best and most respected property data analysts, Kent Lardner, the founder of Suburb Trends, who has recently released a report on the hardest

five markets to measure house prices right now. So welcome back to the show, Kent. Thank you, Bushy. Thanks for the invite. Mate, this is a great subject that's close to both of our hearts. So we're pretty keen to dive into this one. Let's kick off with your opinion on the usefulness or otherwise of the most commonly used suburb medium to measure property price trends. Yeah, one of the biggest problems I've always found is the use and abuse of a suburb median. Probably what really kicked this off were there were a number of suburbs that were on these top 10 lists, the top growth, so we've all seen them and a couple of them were areas where they were old farms and old shacks and

whatnot on main roads and they it was a redeveloped site um and it was fern bay just north of newcastle and it made the top of the list for a long time and it was because it came off a base that were you know a number of properties purchased for two or three hundred k and then were selling for 500k um and there's a number of these happening around the country so that was the catalyst for me so what's the problem the problem is we don't really have a true measure of what it was a year ago or or even a month ago what it is now and we've got this problem of compositional bias now i'll start at a suburb level the problem we've got at a suburb level is uh the assumption is it needs to be normally distributed it needs to have most of its sales in the middle and you're tailing

off either side the old bell curve the old bell curve and the problem you've got and it's most perfectly illustrated along the beaches. So if you go to a beach size suburb, you've got one market that sits along the beach, and then you've got a market that sits walking distance to the beach, and then the other. And a lot of these suburbs that are long suburbs, i.e. they don't stretch along the coastline, but they've got that little patch that sits near the beach, and then stretch back one or two or three kilometres backwards. It's pretty easy for you to imagine that there are three distinct markets. When you look at the price distribution of these suburbs, you can clearly see market one, market two, market three in three different distributions. So when you're

measuring the median there, it only takes a little bit of a shift in what's listed for sale at the bottom end or a little bit of a shift on what's listed for sale at the top end to have a dramatic impact on the median. So that's that thing I call the compositional bias. The problem with that compositional biases you can jump at shadows yeah spot on and if you go through a period where there's very few sales then again you can get distortions that are coming out of that when you're trying to join the dots and draw lines across a period of time exactly and and there are measurement systems that try and control some of those variable things you may have heard of hedonic indices etc you can control for things such as a bedroom you know pulling in comparable

sales and adjusting for how big a house is and whatnot. You can apply a coefficient to adjust for a bedroom count and effectively normalize the whole lot. But you can't control for the fact that there's going to be listings that come in that are at the top end of town and then they're not there again. So you can't control for everything. So compositional bias exists no matter what you try, it exists and you need to just call it out. And I think the biggest thing is to kind of appreciate it exists and then look for ways to remedy it without only relying on a suburb median and what i've attempted to do is to find the goldilocks which is uh what i call us what the gut abs call a statistical area three sa3 so the australian bureau of statistics created its own

set of geographies the smallest ones around 200 homes and they call that an sa1 and like a lego that plugs into an SA2, which is about give or take about three suburbs big. And then the SA2s plug into what's called an SA3. And across the country, give or take, there's about 350 of those. So I use that as my measure, because we used to all use LGAs, local government areas in the day. But the problem is Brisbane turned into the blob and aggregated and kept on going. So it became the the biggest you know lga in history and it's some of those biggest states it's a monster right so and then the gold coast did the same thing so it almost became irrelevant to measure um at an lga level because of brisbane it's too big and you know anyone who knows brisbane it's a lot of

markets yeah whereas the sa3 carves it up uh in in i believe a fairly perfect size so i use sa3s from a median in most cases they're normally distributed but it's not always not always and there is there there are problems there which is the foundation of that report yeah okay well let's sort of drill into some of the other approaches that can be adopted to measure house price trends and and talk about some of the pros and cons of them yes the probably the one that stands out and we i tried building this or we did build it back in the day 15 20 years ago called a repeat sales index or the case shell methodology. And this is widely used in the United States. What it does is it takes a property and then tracks its history through time. And so what you need

for it to enter the data set or the sample to be used and measured is two sales, sale one, sale two, and time in between. So what that tells you is property A grew by a certain size over a certain amount of time. Once you put them all into a bucket, you can slice it and dice it come up with an average growth rate by a given geography. So in principle, that sounds great because it does control for a lot of that compositional bias. You're measuring the same thing, exactly the same thing through time in theory. There are a couple of gotchas and a couple of reasons why it hasn't worked that well in Australia. Our whole period's been getting longer and longer and longer. Good point. And our sample sizes get quite small in certain

geography so in america it seems to work quite well for rentals it works quite well in australia because rentals come back on every three or four years but for sales it hasn't worked that well yes it can work well for units because units have a lower hold period right but by and large we don't have this type of measurement problem when it comes to units most of this measurement problem pertains to houses good point good point any other approaches then and their pros and cons Well, the other approach is the hedonic index or hedonic approach. Now, I won't mention any particular brand or any company, but the approach there is similar to the way an AVM works. Effectively, if you pick the same sample of properties is one method, and you use an AVM to value that same sample of properties through time, and then you measure that median.

That controls for the fact that there might be sales that come in that are bigger or smaller than that house that you're valuing with an automated valuation model. And that is automatically adjusted for. So that's that hedonic adjustment. And then if you control that sample through time and you hold the same properties through time, you get a little bit of the best of both worlds. You get the best of the hedonic, you get the best of the repeat sales,

but none of these are perfect. Yeah, okay. So picking amongst those, which do you believe is the best and most useful method to apply? Look, I like the simple SA3 median. The reason why I like to use it, it's because it's easy to explain. So there's no smoke and mirrors.

And also you can capture and use agent advised sales. So you get an early reading on the market. So with a lot of models that rely very much on data that's processed through the state governments, you've got a significant lag there. So typically what you'll find, the law of large numbers traditionally means that as you collect your sales, you land on the median pretty quickly and it shouldn't vary from that. So if it's normally distributed, you don't need 100% of sales to land on the median. You need a statistically relevant sample. And in most cases, agent advised sales do represent more than 50% of total sales. So agents will push their sales out there quickly.

You can collect that and measure that at an SA3 level and arrive at the median very, very quickly. Yeah, I like it. Well, let's have a look at the report that you've recently released. What are some of the hardest housing markets to measure this year and why, Ken? Yeah, so this is a snapshot in time. So I did this report as of listings in August. So what the call out here to is that this volatility varies month to month. So what was relevant and what is relevant for August is not always going to be guaranteed for the future month.

So as of that particular time, here's a couple of call outs. I'll list down the areas and I'll drill into a couple of them specifically. So we've got Brisbane inner city, Broad Beach, Burley. So in Queensland, eastern suburb south, which is Sydney, Port Phillip down in Melbourne and the southern highlands. So, you know, the nice area of the southern highlands in Brisbane. probably, I don't know, an hour and a half west of Sydney, maybe two hours. So the one I wanted to focus on specifically, Broadbeach Burley, this is really interesting. What I tried to do is come up with a measurement system to tell me if that compositional bias existed or exists at the

SA3 level. And the best I could come up with was to say, here is the SA3 median, let's split the suburbs into above the median and below the median and then count their listings and therefore if I see a significant shift above or below or into those suburbs that are above the median or below the median that will give me a reasonable proxy for what type of bias might be in the measurement in the months months to come so here's Broadbeach Burley Mermaid Beach and Broadbeach waters were above the SA3 median. And they had a reduction in listings against their, you know, so effectively the six month average, they had a reduction of 10. But the suburbs of Mermaid Waters, Miami, Burley Waters and Burley Heads, they had an increase of 19 listings. So it was quite a

significant shift there. So quite an imbalance between the above and the below. So I'd expect that once those listings end up selling there's going to be a compositional bias down to give me some level of artificial decrease in that price for that particular market yeah it's interesting and the sort of uh buyer and or seller intentions behind the properties in terms of their values you might you might get those at a higher price point who are thinking well we'll just we'll just sit tight the whole minute and then others at the lower that are that are more active is that having an influence do you think there's some i have to make some assumptions as to that because you know the idea would be that i could get on the phone and call the agents that's what i'd love to do i

just you know don't have that time to do it but that would be the ideal because i can describe the what and what's going on but the why ultimately is really the the the discussions with the the buyers and the sellers um so yeah i have an assumption i've always held the assumption that the blue chip markets especially um people will hold they don't have to sell they're smart people they're in a multi-million dollar property for a reason no it's a very good call man what's for those that have you know you've really captured their interest where can they get a copy of the hardest five markets to measure house prices report yeah it's a free download on suburbtrends.com just go to the home page and scroll down yeah awesome mate look i really want

to thank you again for these very timely insights, Ken, and thanks again for joining us on the show today. Thank you, Bushy. Awesome, Kent. Well, here is yet more evidence that trying to read the tea leaves of property trends and basing your property decisions on non-existent property markets that revolve around suburb medium price movements is likely to be close to meaningless and misleading. So if you want to tap into much more relevant and useful data, take advantage of Kent's complete suite of property reports that you can access now at suburbtrends.com. Stay with us for more here on your place for all things property, Realty Talk. Property deductions can save you thousands of dollars each year. To make sure you maximize

deductions, you need to work with the most experienced quantity surveyor in the country. BMT Tax Depreciation is the leading specialist in the industry. They've completed over 700,000 tax deduction schedules for residential investment and commercial properties Australia-wide. BMT guarantee to find double your fee in the first full financial year deductions. Call BMT on 1-300-728-726 today for an obligation free quote. Greetings and welcome. Now, as a result of the flow and effects of a pandemic, the construction industry globally has been plagued with challenges with supply chain issues, material cost blowouts, time delivery delays, and trade availability, availability, creating serious uncontrollable risks for just about everyone concerned.

So what's the answer? Well, to shed some light on an innovative solution to these challenges, we joined for a two-part special feature on this issue by Arvid Mayhill, the co-founder and CEO of world-leading Australian 3D printing, building and construction company, Luton. So welcome to Realty Talk, Arvid. Oh, thank you. Thank you for having me. Pleasure. Yeah, really looking forward to diving into this because that's a pretty exciting area that you're working in. But to sort of kick things off, how do you see 3D printing revolutionising the building sector?

Well, I can see it bringing, I would say it will revolutionise the sector, but at the same time, we're merely just telling folks in the sector that we're bringing manufacturing processes that existed in every other product down from this pen that I know, if I bought it here or in Japan or in the USA, it will have the same quality assurance. Same to the Tim Tam and to your automobile. You have certain processes that made these products more affordable,

cheaper, and created more jobs. um the construction industry right now just to build a wall similar to the one behind you um unnecessarily we use a very um if you will convenient method that results in the following no one makes money yeah behind you raw materials are really it's just a nightmare to control such supply chain you got the brick wall the motor which is by the way a lottery you know you and the bricky that you have sometimes the motor is much stronger here it's weaker here you get the cracks but then after we put the wall the more the brick and mortar wall you need a timber truss a timber frame which costs an arm and a leg just so that we can put the electrical sockets the

other systems because we can't put it directly to the brick and mortar we cannot drill in the mortar and brick and mortar correct yep well uh after that to make the house look nice inside and where we can you know where it can become livable uh you need the plasterers and you can't insulate the bricks there are some solutions out there but they're very niche and it's also impossible to make sure that they are omnipresent for everyone to buy. We're talking here about six, seven trades

at least. Twelve different materials down to the staplers that you put the rock wall for example in the timber truss with. You can't just use any stapler. If any one of those things are

missing in your local supply shop, your project stops. The delay there. But set the delays aside, you're talking about different crews. That's a high frequency footprint, where the human element is the major element. So errors always appear, and every crew blame the other. um in this scenario that i just described no one is making money not the guys whom are doing these trades not the developer not the builder and as a customer you're not getting a good product but it's it's i know it sounds comical but true you're uh chewing gum or your TimTam has way more automation and safeguards and protections than the most significant purchase in

your life, your house. We don't buy houses every day for the majority of the public, at least. And we don't have any kind of safeguards for that. So why 3D printing? Well, 3D printing, right now what we're looking at automating this is a huge industry and we're looking at automating this at this state around the world one element it's just what i described in the wall so that we can and we discovered also that you can make the wall and the house even more uh energy efficient so it will help with your other bills it's way much more stronger material that we use because to get the concrete or the geopolymer or whatever material you want to use to behave in that manner we need to work on the chemistry of it to make it you know give us these kind of physical

characteristics yeah it's pretty pretty exciting yeah but in the context of using i think you've got a proprietary product called ultimate crate and so you am i right in saying that it effectively it's pretty much one trade that you're using to build the walls, the roof, the whole shooting match. I mean, that's very exciting in the context of what's going from quality control, from a cost, from a thermal insulation, from an ease of installation perspective. It's pretty exciting. I'd love for you to share the sort of the history of 3D printed construction and what's happening in this area overseas as a bit of a benchmark of where we sit. Well, with 3D printing construction in general, historically speaking, there is a video circling around.

It's from the 1930s, where Herschel, the founder of the Herschel company, the chocolate making company, tried to use a technique where he put rammed earth walls. now that's a misconception out there in the industry that they say oh that's the first 3d printing printed house but it was using round earth material that goes around in circle up and down up and down and it gives these sort of beautiful layers the robust the stronger um in the 1950s we saw the first robotic bricklayer so there was a robot that's putting the bricks over each other and it's featured in the bathe channel on youtube but however at the time those were all something that we look folks at that era look that this is for the future. This is what the future would look like. It was just

at the level of the prototype, no one really saw the need to automate this. For food industries, automation was adopted because of the need for it. It was a tool to project many things. Country's soft power, culture, if you will exporting certain cultural elements from one place to another food is a very good way to get people to connect through culture however with construction coming all the way

around the world 3d printing has done well in almost every other sector whether it's metal with plastics recycling so it's been always in the university laboratories it was until it really blew out and became a thing when a company in russia called episcore uh now it's in florida melbourne florida not our melbourne and they printed a small room they showed with a robot you could do it this way this way now they are not the first the first guy ever who's done that he's done it with a powder bed printer and he was an academic as well and the house was built in a factory and sent to some place and it had a crack by the time it got there that's why we we saw people now are more into the on-site printing kind of concept

so and then started to flourish in the usa and in europe in particular with people trying different robotic systems some are trying a very rudimentary uh large-scale uh gantries that actually at the time oh this is the big gantry in the world no the biggest gantry in the world is in the port next to us here you know that is so and that's where lutein came We were in Australia. We were watching this very carefully. We started, if you will, in stealth mode late 2016. We were mostly early career scientists at the time, and we started with the materials. We understood the materials is a big deal. And we started in Australia. We are very unique.

We have a union culture. We don't like for people to lose their jobs. We have a lot of things going on. And at the university, we were very cognizant of those things. But we were also worried about the wasteful nature of the industry and climate change and all this. Like for our generation, these are a big deal. So we wanted to do something, and rather than just keep talking about it and complaining, the government is doing nothing, whatever,

hey, let's do something together, you know? Yeah, no, I love it. It's pretty exciting. Sort of projecting forward then for a second, Ahmad, what percentage of 3D printed housing are you predicting is going to happen by when in the future in Australia, do you think? I'll get to that in a second. We'll just go to how we got to the first house ever printed, because we had to show the code of compliance that can withstand earthquakes, bushfires, and be resistant to flood, and all that sort of things.

And that will lead me to that prediction. How did we come up with it? Based on what data in front of us that led us to make that very well-informed prediction, which we think we might be even conservative about that number. um one of the things when we started before we print the first house ever in australia and it was an uncontrolled environment so outdoors conditions if you will it was printed bespoke and then we printed one in one go recently the whole thing is how would people would people live in it would people like it so we were listening to everyone from the folks who said oh it looks like toothpaste the folks will go like wow i like that that's rustic that's that's dope that's that's the kind of finish i like uh and we realized that in australia there is a crazy need for this we started getting calls from regional towns uh i can name to you more regional towns in australia

than you could tell, you know, and the reason is these are folks, I'm not talking about folks who are looking for something cheaper. These are folks with money and the bank account, and they can't find a brickie, and they can't get the project up from the ground, and when we started in 2020, I used to explain to folks How the process goes on, how it works, why layer by layer, why it's stronger, why it's cheaper. And this right now, since I think since the first flood that hit New South Wales, we get calls like, listen, mate, I'm sold on it. How fast can you get it to me here? That's what we've been hearing for the past few months.

yeah others in the industry folks who've been doing other kind of construction niche niche products to leave that and jump into the 3d printing um because they can see how important this what kind of important issues that we're solving first most of the time uh we got calls from lismore when someone just told me listen ahmed i know you're a startup whatever but imagine this how can you how long can you have your best friend living with you in the same room I've had him for eight months and it's getting through me and the guy has money and they're living in their land on a tent and they have jobs they have other commitments so it's something like you hear folks who are really doing well in life and it's an issue with the execution

Yeah, absolutely. I read something that you sort of indicated that you're aiming at perhaps 30% of houses being 3D printed in the not-too-distant future. That's a very exciting exercise, mate, and I sort of want to drill into the details in part two of our interview, which we'll record soon. So I really want to thank you for coming on board today and opening our eyes to the 3D printing building opportunity, Armand, and thanks for joining us on the show.

My pleasure. Well, what an exciting building revolution is at our fingertips, which we're, as I've already mentioned, going to dig in deeper in an upcoming episode of Realty Talk. And if Armand has captured your interest in 3D printed construction, then reach out to him and his team at Luton3D.com. That's L-U-Y-T-E-N 3D.com. You're watching the Property Hub's Realty Talk, your trusted voice for all things property.

Successful property investment is a game of finance. Do you have the right team and the right game plan? Realty Talk is brought to you by KnowHow Property. More than mortgage brokers, Bushy Martin and his team of investment architects set you up with a sustainable strategy structured to lower your costs, tax, risk and stress while increasing your capacity for growth. KnowHow has helped over 1,900 homeowners and investors secure more than $800 million in property wealth. So get set to live more, work less and live your legacy. Want to know how to invest in your freedom? Visit knowhowproperty.com.au. Hi and welcome. Now in our years of

experience working with property buyers, investors and buyers agents, property hunters and purchasers tend to operate at each opposite end of a spectrum that runs from borderless and totally desktop research focused with little or no local knowledge at one end to the backyard of the other where buyers have great intimate local knowledge but no quantifiable data to confirm if the area and the property is actually the best available to achieve their goals. Now this creates an obvious challenge because to be a successful investor that secures outperforming properties, you need both leading edge research to identify the best location and best property across the nation at your affordable spend, as well as hands-on local knowledge to confirm that the area and the property not only

looks good on paper, but it's actually supported on the ground. So how do you overcome these polarised approaches to secure the best property available across Australia's 15,353 odd suburbs and just under 11 million properties? Well, to help you overcome this conundrum using his unique fab property search framework, we're joined by Joe Tucker, the founder of Property Principles Buyers Agency, as well as the co-founder of the hugely successful Oz Property Investors Facebook community, which now has a bit over 28,000 plus members. So welcome to Royalty Talk, Joe. Thanks for having me, Bushy. It's amazing to be a part of the community. Yeah, no, awesome, mate.

You're doing some fantastic work in educating people on how to invest better. But to sort of jump straight into your awesome framework, what does each element of your unique FAB property search approach stand for? Well, yeah, I mean, it's FAB, F-A-B. So it's fundamentals, analytics or analysis and boots on the ground because property is art and science as well. it's not just a spreadsheet and data and you just can't spit all of it into a machine and then crunch the numbers and work out what is the best so um yeah if we want to go down that rabbit hole

to kind of open up um what each is so f is for the fundamentals so the fundamentals are things that are fundamentally important to the region why is that region going to grow and what are the things that are impeding that growth as well so that's things like population what is the population of the area? Who are the people living there? Employment, have they got jobs? What are those jobs? Is that a diverse lot of jobs as well? The next one would be projects. So what projects and infrastructure is going into the place and how is that going to affect the demand for housing? Because not all projects are created equal. So if someone's creating a road, they're spending millions and millions on the road, that may be good for now, but is it a road around the town

to get people away from it, look for things like hospital upgrades. Those are awesome because you're upgrading the hospital, you're bringing new jobs and bringing new people in. And then the other is desirability. And this is one we will touch on with boots on the ground. Is the area desirable? What is the council doing to improve things? And then what you've got to then look is what is steering the balance

out of kilter a little bit is the supply of properties coming on the market. How many developments are going on in the area? what is the housing supply? Because what we're trying to look at is the supply and the demand of property. Yeah, very well said, mate. That's a great summary of the F of fundamentals. Let's dive into the A now. What are the key components and critical questions that you uncover under the analysis part? So on the analysis side of things, that's more of your hard science type of things. It's not too difficult to understand either. It is the inventory of property that's on the market it's the days on the market it's listing volumes are they trending up or down

vacancy rates what is that looking like is there anyone there to rent your property if you do end up getting it um vendor discounting is the vendor giving a discount or are they giving away you know are they giving yeah paying extra for it um and then also understanding some of the renter proportions is there a whole heap of renters in different you know sa1 so statistical area ones it may be a little bit of a red flag. So you've got to analyze all of that data as well, but it's crucially important. You don't want to be looking at a place

that has a whole heap of supply coming onto the market and you're just buying another property and you're not going to get a renter. One, and the value of the property hasn't got pricing pressure to push the values up. Yeah, I love that. Well, let's switch now to the B of the fab but and you've sort of started to touch on this already but uh when we talk about boots on the

ground it sounds fairly self-evident but run us through what this actually entails well yeah it's exactly that it's not a science like this is where the arts kind of comes into it you need to get to the property i mean you're going to be spending the most amount of money this is going to be one of the largest assets of your life and people just don't go and check out the area you need to get boots on the ground in those locations because what you want to do is trust, but verify. You want to verify what the data is actually telling you out there and speak to everything. You want to speak to everyone there, speak to shop owners, speak to real estate agents, speak to property managers and look for things on the streets, right? Like if you see a whole heap of burnouts

and shopping trolleys, that may not be the best area for you to be putting your cash or it might be you know but you want to look for where are the not so desirable not spots i guess you can call them or the hot spots where are the areas that people actually actually want to live yeah and i very well said mate now you and i had a a great conversation on this on get invested recently yeah and you gave a really good example of how the actual fab framework comes together can you sort of run us through that or something similar so that it puts some shape around how the fab framework actually works on a day-to-day basis yeah so the fab the fab starts at the keyboard it starts at a high high level with your budget of how much you've got you then start to

research those areas those 15,300 and odd suburbs like you said at the beginning until you get a smaller and smaller list until you can go out to those few areas so the way we used it a good example is I went for a road trip. I think I spent, I drove 1,384 kilometers all throughout Victoria, choosing the areas that I wanted to understand the fundamentals and confirm what I saw in the data. We chose four locations in that, in that Victoria, and we ended up moving away from three. So I sat down, I went to a location, was having a chat with a hotel owner, and he gave me the warts and all story of every single area of this place and you know those maps when you go yeah this might be a little bit old school but you go to a hotel and you get one of those big maps of

the town it lists out all the streets and literally you just go around circling all of them you call up the property managers no this is a not spot this is a not spot this is a go spot and you just ask questions like if you were to buy somewhere where would you be buying where are some of the areas to avoid and you can start to paint the pictures. Where are some of the up and coming areas? Because that's really what we're after. We're after areas that people can't see the value in just yet. But yeah, I chatted to this property manager and we ran through, sorry, this hotel owner, we ran through all the details and it turns out that this is not an area that we want to invest in. And it wasn't just that conversation. It was overlaid all of that, but on the computer,

it looked amazing it ticked all of the boxes from a data and analytics side of things but um if you don't actually go there you could end up with a lemon we saw that the infrastructure projects that looked good um weren't really getting enough attention and it didn't really do the things that it said it served in the real world because it's uh yeah there's a whole heap of those little nuances that you can get get stuck with yeah and and and that's the real essence that you've shared with us there it can it can look great on your computer screen but uh you know as we all know uh you know areas have reputations that are hard to shift and if a community has already perceived a certain area as good or bad then that does the influence what happens to the property

side of the equation day to day so i might really want to thank you for sharing that awesome fab framework, Joe. And thanks for coming on the show again today. Yeah, thanks for having me. Hope it's valuable. Awesome. Thanks, Joe. Well, there you have it. If you're serious about achieving the best of both worlds with your property search approach, think about adopting the FAB framework. And if you're too busy, or you need an expert to do it for you, reach out to Joe on the Property Principles team at propertyprinciples.com.au. And if you're looking to rub shoulders with like-minded property investors in a safe trusting environment, where you can learn and share from industry leaders and investors without fear of being sold to, then join Joe's Oz Property

Investors Facebook community or have a listen on ozpropertyinvestors.com.au. You're watching Realty Talk, your go-to place for all things property. Now, before I leave you, here's a final thought from me. I just want to reiterate that the mainstream media has been hell-bent on scaring the masses by continuously talking about property markets that don't exist, experiencing statewide medium property value declines that are best misleading and at worst, downright dangerous. Now, this is creating a self-fulfilling crisis of confidence as many potential property players sit scared on the sidelines and on the fear fence doing nothing. And this creates a great window of opportunity for contrarian investors who

get greedy when others are fearful because the reality is that we're in the eye of a property boom storm with strong property condition fundamentals being strengthened by limited supply and growing demand from the incoming tidal wave of 195,000 extra skilled migrants a year that's going to create increasing and mounting demand pressure. So if you're a serious property investor now's a great time to buy because it's never a question of when it's always about what and where that's more food for thought and that brings us to the end of this week's show another big thanks to our guests Kent Lardner, Albert Marhill and Joe Tucker and to make sure you don't miss another episode of your trusted voice for all things property subscribe to our

Property Hub on your favourite podcast player, where you'll also enjoy the Get Invested podcast delivered to you each and every week. And make sure that while you're there, you sign up on the realty.com.au homepage to get a free copy of my award-winning book, Get Invested. And while you're there, make sure that you also check out one of Australia's most extensive range of properties for sale from over 7,000 agents nationally, where you'll even find properties that just aren't listed anywhere else. Thanks again to realty.com.au, BMT Tax Depreciation, Apiro Marketing and DM Media for their ongoing support. I'm Bushy Martin from Know How Property Finance. Remember to always get invested in your knowledge before you get

invested in your property and I look forward to seeing you again next week. buyers, sellers, and agents differently.