Master renovator Cherie Barber joins us on the show this week and tells us it is possible to earn a healthy living from doing full time renovations in any market but there are some strict guidelines.
Also Michael Yardney shares the 4 steps to financial independence and solicitor Rob Balanda has some great advice on how to avoid being gazumped when buying property
We also have details of Terry Ryder’s new infrastructure report which highlights locations around Australia which have good capital growth prospects
Ken Raiss from Chan & Naylor joins us to answer some of your questions and we have details of Homeley.com.au a new website that could be the new way to find a property.
Click the link above to listen, or you can read the transcript of the interviews below.
Transcripts
Make money through renovations in any market- Cherie Barber
Kevin: This time I am catching up with Cherie Barber, recognized as probably the best renovator in Australia: Cherie from www.RenovatingforProfit.com.au. Cherie, thanks for your time.
Cherie: You’re welcome.
Kevin: There’s a great DVD at the website www.RenovatingforProfit.com.au entitled “Learn How You Can Earn One Year’s Salary In One Month.” Is that really possible, Cherie?
Cherie: It is. But in order to earn one year’s salary in one month, you need to have the right knowledge on how to do that. Obviously, it focuses on accelerated renovations – doing them very, very fast – which takes certain skill sets to be able to do.
Kevin: Let ‘s dig a little bit deeper into this concept because the market continually moves. It changes. It becomes a buyer’s market, a seller’s market. Is renovation for somebody who wants to get into property and a good way to start?
Cherie: 100%. In fact, what I normally say to the people that I public speak to around the country is that if you are somebody that is just starting out, perhaps you have not got that much cash – you have limited equity – I say the best strategy is actually to start with a property renovation for a couple of reasons.
One, renovation is within the skill set of most ordinary Australians. Certainly not all aspects of the renovation are, but most people can feel very comfortable painting, planting plants in the front garden, paving, painting driveways. They’re all within the comfort level of most Australians.
The biggest thing is that renovating is the most aggressive form of property investment. A lot of people look to property investment as a way to build their wealth these days. Renovating is not about waiting for growth. It’s all about manufacturing your own growth, adding value to a property. It’s a great strategy regardless of what the market is doing.
Kevin: Is there a danger there of over-capitalizing?
Cherie: Definitely. Again, most people can do renovating, but most people are uneducated on the formulas of renovating. There are a lot of formulas: what you spend on a cosmetic renovation, what you spend on a structural renovation, and then there are actually sub-formulas of what you spend on a room-by-room basis.
For example, if somebody was doing a cosmetic reno where they’re coming through, let’s say, buying old house and cosmetically renovating everything and not doing any structural changes, the general rule of thumb is that you spend 10% of the property value.
For example, just to put that in mathematical terms, if you buy an old house for $350,000, your total cosmetic renovation budget is $35,000 (10%) and that’s for everything inside and outside, not a dollar over.
Kevin: Are there some rooms or some areas that need more focus than others?
Cherie: Yes. The kitchen and the bathroom are the two biggest rooms internally that add the most value, so you will portion that 10%. For example, if we buy a $350,000 house and the renovation budget is $35,000, you will portion more of that budget to the kitchen, more to the bathroom. For example, of that 10% renovation budget, 20% goes to the kitchen and 20% goes to the bathroom. It gets quite convoluted when you look at all the percentages, but in my workshops I do teach these on a room-by-room basis.
Unfortunately, none of the renovation shows will teach you these sorts of formulas, and most people, unfortunately, when they go into a renovation are armed with a wheelbarrow full of enthusiasm, but they don’t know the formulas, and they do over-capitalize. They get to the end of their renovation, and they realize they spent more money than what they really should have.
Kevin: I want to ask you a question about those two areas you mentioned: the kitchen and the bathroom. They both would seem to me to be appealing to the female eye. Do you think, therefore, that the female is fairly instrumental in the buying decision in these renovated homes?
Cherie: Absolutely. I hate to say it – and I will probably get myself in trouble for saying this – but if you have a normal husband and wife scenario, typically the female is a very strong influencer of whether a couple actually buys a property. The female typically makes the decision, but we get the hubby to pay for it.
Kevin: I guess that brings about a whole new layer of complexity for male renovators who have to almost think like females or even bring someone in like you who can actually look at it from the female point of view.
Cherie: Yes and no. I obviously I have a lot of females come through my workshop, but I also have a lot of men come through my workshop as well, and what’s most important is not necessarily looking at those finer details. They’re important, but the most important thing is knowing who the buyer is that’s going to buy that house.
This all comes back to your suburb demographics (what I call suburb due diligence) – knowing who is going to be the likely buyer of that house. That is a very simple question because if you know your suburb, you are going to know who the likely buyers are in that suburb, whether it is a family home or a young couple without kids.
All of those questions about how you renovate and what type of fixtures and fittings you put inside the renovation become so much clearer when you know who the likely buyer is going to be all before you start renovating.
Kevin: Cherie, as always, a wealth of information. It’ been great talking to you. Thank you so much for your time.
Cherie: You’re welcome, Kevin. Thank you.
4 steps to financial freedom- Michael Yardney
Kevin: More and more we’re seeing Australians start to choose to invest in property to develop financial freedom for themselves and get themselves out of the rat race. Commendable, I say. How do you go about doing it? Let’s find out.
There are some definite steps you can take. Joining us to explain what they are, Michael Yardney from Metropole Property Strategists.
Michael, what are the steps you can take?
Michael: Before we discuss that, maybe we should understand that we’re all at different levels along the spectrum of wealth. I think it’s useful for an investor to see where they are. Basically, we all start from the bottom, Kevin, and we all want to get to the top. Can we go through those maybe five levels that I’ve found investors fall into?
Kevin: Okay, let’s go.
Michael: When you talk about financial independence, we all start at level zero, a level of financial instability. Interestingly, most Australians are still at that level. They live from paycheck to paycheck. If they have an emergency, if they lose their job, if their car breaks down unexpectedly, they’ve actually got to dig into what little reserve they’ve got. But, in fact, most of them actually borrow. Often, the money runs out before the mouth does. To me, that’s level zero financial instability.
Level one would be a level of financial stability. To get there, I think you’ve got to have a little bit of accumulated assets – maybe in savings in money or in a line of credit – to give your current living expenses for, say, six months. You’ve also probably got to have private medical insurance and life insurance, just enough to cover you.
Kevin, to me, that’s just basic, though. That’s financial stability. You’re going to have to actually build your resources more to start moving up the ladder.
Kevin: Level two?
Michael: Level two we’ll call “financial security.” Now, you’ve accumulated sufficient assets – you may have a substantial property portfolio, you may have shares, you may have a little business – to cover your most basic expenses. If you needed to stop working, it would cover your home mortgage, your related expenses, your car expenses, your grocery bills, your insurance premium.
When you reach this level, you can stop working and you can maintain a simple, basic lifestyle. Smart property investors can achieve this by growing their property portfolio. I think there’s more in life than that, though.
Kevin: We’re at level two, which is the third level. There’s level zero, level one, level two. I wonder how many people actually get to level two, Michael?
Michael: In fact, most don’t. When they even get their superannuation, they still need to be dependent upon the pinch. They’re not independently financially secure.
That’s not enough. I’d like our listeners to achieve financial freedom. When you’re financially free, you’ve accumulated sufficient assets and have enough passive income coming in to give yourself the lifestyle you desire. That’s very different.
Not just your current lifestyle, but you’re going to have all of your expenses covered, even if you don’t work again. If you’re a successful property investor, maybe you won’t necessarily work again, but you can make choices whether you do or not, just like you and I still work because we’re having fun doing it.
Kevin: That’s right. You mean there’s another level above that, too?
There’s even more than just financial freedom. That would be financial abundance. A really small group of successful business people and property investors achieve financial abundance.
When their portfolio works overtime, then they’re free of the financial pressures. They’ve got so much surplus coming in that they can give back to the community. They can do charitable work. They can give donations. But despite doing all that, their cash machine still keep pouring out money, and the assets keep accumulating. That’s a great position to be in.
Kevin: Wonderful stuff. How do you start climbing the rungs? Are there any definite steps you can take, Michael?
Michael: I think it’s important to have a plan to have steps, Kevin. You’re right.
First of all, I think you’ve got to decide to become wealthy. Interestingly, most Australians don’t even think about it. They’re too busy running their lives and having fun to actually think about the future. They don’t even dream about financial independence. Step one is decide you want to become wealthy.
Step two would be to invest in your financial education before you invest in other things. Spend money and time investing in yourself. If you’re starting off focused on increasing your financial education through shows like this, books or seminars, find a mentor. Find somebody who’s already achieved what you want.
Step three is to actually take action. You don’t have to wait until you know it all to get started. If you do, often you actually never end up taking that first step. Most people want to make so sure it’s all safe and sound that, in fact, they don’t take that first step.
The fourth step is to surround yourself with like-minded people. People read the magazines about self-made millionaires. In my mind, there’s no such thing as a self-made millionaire. All financially independent investors that I’ve come across surround themselves with a smart team of advisors and professionals as well as like-minded individuals they mastermind with, and mentors, as well.
The lovely thing about money and wealth is that it doesn’t discriminate. It doesn’t care who you are or who your parents were or what your education was. Whatever you’ve done in the past, you can wipe the slate clean. Basically, you start with the same rights and opportunities as everybody else.
We’re so lucky in Australia that most of us can get to that level of financial independence. Quite a good group of us should be able to get financial abundance.
Kevin: There you go: the five levels of wealth and the four steps to getting there. Michael Yardney from Metropole Property Strategists. Michael, thanks for your time.
Michael: My pleasure, Kevin.
Don’t get gazumped- Rob Balanda
Kevin: You may or may not have heard of the term “gazumping”. I guess you might have if you’ve been in real estate or you’ve been around real estate people. Let’s find out what gazumping is, because there may just be a way around this. While it doesn’t apply in all states of Australia, it certainly does in the two major states of Victoria and New South Wales, which is where a lot of our listeners reside.
Rob Balanda from MBA Lawyers joins me. Rob, first let’s get an explanation about what gazumping really is.
Rob: The seasoned investor in New South Wales would probably think that’s a strange question to ask because they know only too well. They’ve probably been burned a number of times. It’s a Yiddish term. It means, essentially, to overcharge or cheat. It basically means when a seller has secured a property by signing a sales note in Victoria or New South Wales, they think that is now under their control and is off the market.
But while your solicitor is negotiating with the seller’s solicitors to do the little ceremony called exchange of contract, which takes place in three or four weeks after you exchange sales notes, the seller is like the prettiest girl in the class in school, negotiating with two, three, or more other people to sell the same property to.
Kevin: Which school did you go to?
Rob: It wasn’t an all boys one, mate.
Kevin: Obviously not. So that’s gazumping. It’s still fairly commonplace, isn’t it?
Rob: I was talking to a chap at [1:33 inaudible] last week. He was lamenting to me and complaining that he just put in two offers and had been gazumped on two of them that week. His question to me was, “How can I avoid this happening to me a third time this week?”
Kevin: I understand you do know that there is a way around this. What is it?
Rob: It’s not rocket science. What you need to do is remember the process in the two big eastern seaboard states is that you start with a sales note. Then your solicitor does all the searches of the property, all the due diligence. Then three or four weeks later, they sign off on the contract – the terms of the contract with the other solicitor. Then you have an exchange of contracts.
In the big resource states, Western Australia and Queensland, that’s the same position you’re in when you make an offer. You make them in those two states via a live, active contract. Once accepted, that is the same position you’re in three or four weeks later in New South Wales when you actually exchange contracts.
You basically need to move to that Western Australian/Queensland position as soon as you possibly can. Don’t do all the searches, checks, and due diligence before you exchange, because in that three or four week period, that’s when you can be gazumped. You can have the seller double or triple dealing you.
How do you protect yourself then? That’s the question. How do you protect yourself if you’re going to instruct your solicitor to exchange contracts now? Don’t do the searches. Do them as we do them in Queensland and Western Australia after the event. Or exchange contracts subject to a little clause: subject to due diligence. That way, your conveyance or solicitor can do the searches after you’ve exchanged. That way, you’ve taken the property off the market and you cannot be gazumped.
Kevin: Robert, something just occurred to me. This could be one of the reasons why auctions are much more popular in New South Wales and Victoria, because if you buy a property at auction there, it is unconditional. You are not going to go through that sales note process.
Rob: Yes, and you can’t be gazumped. You can’t lose the property. You can’t be Dutch auctioned either. Yes, I agree with you Kevin.
Kevin: Because in Queensland, when you buy a property, as you indicated, and you sign a contract, once that contract is signed by both parties, it’s a formed agreement. You can’t be gazumped.
Rob: No. The only person who can pull out after you’ve done that is you, the buyer. You control it. But you get pushback, though. Even when I talk to solicitors in these other states, they push back and say, “No, you can’t do that down here.” In fact, you can. There’s no legal reason why you can’t instruct your solicitor to exchange contracts now, subject to a due diligence. It’s just that they don’t usually do it with residential purchases.
Kevin: Why is that?
Rob: That’s because in between the sales note and the exchange of contract, they do all the searches. They apply for finance, they do the pest and building inspection, so there’s usually no need, by the time you get to the exchange of contract stage in those two states to have any sort of “subject to” clause. They’ve all been satisfied. But there’s no reason why you can’t do it.
In fact, in New South Wales, you quite often see commercial contracts that are a little more complicated. Quite often they are subject to a number of due diligence requirements, subject to a DA [?], subject to a feasibility, subject to securing other partners to bring them into the deal, etc. It’s common enough with commercial and industrial sales in New South Wales. It’s just a mindset.
Kevin: Effectively, in New South Wales and Victoria, if you do what you’re suggesting, which is put the due diligence clause in there and exchange the contracts, you’re effectively forcing the solicitors to do the type of transactions that are done [5:08 inaudible], which is almost on-the-spot contracts.
Rob: Yes, and there are a couple of hundred years of history reasons for the resistance. You can see why they push back. They just don’t feel comfortable. It’s not the status quo. But as an investor, you’ve got to stop yourself from being gazumped. If this happens to you once and even twice, it will burn you. It will leave you with a nasty taste in your mouth. It will cost you that opportunity. You’ll have missed out on the property. It might have cost you a thousand or a couple thousand in legal fees, in due diligence inquiries and stuff, all just thrown away.
To you, as an investor, the sales note doesn’t even give you a fig leaf of security against the risk of being gazumped. You’ve got to get to exchange of contracts as soon as you can. If you do that, subject to a due diligence, you protect yourself. It’s just a matter of telling your conveyance those are the terms of your offer.
Kevin: But Rob, what if you get pushed back through the agent, from the seller saying, “We don’t want that period of uncertainty”?
Rob: They’re still in a lot better position than they would be if they waited, signed the sales note and waited for you, the buyer, to do all your searches for the next three or four weeks, and then exchange. Something could come up in the searches. The buyer could come back in that three or four weeks before exchange and even attempt to re-write the whole deal.
But at least I would be pointing out to the seller, “If you sign up now subject to a due diligence, at least we’ve nailed the big ticket items – the price, the deposit, and the settlement date.” You’re in a lot better position as a seller, signing up subject to a due diligence, rather than waiting for another three or four weeks for the buyer to carry out their searches.
Kevin: I take it that the due diligence clause has got to be somewhere inside that excellent book of yours, which is called “Clauses Made Simple”?
Rob: Yes Kevin, thank you. You can acquire it by going to my website, www.ClausesMadeSimple.com. There are also many other helpful clauses.
Kevin: There are indeed. I’ve been talking to the author of that book, none other than the one and only Rob Balanda from MBA Lawyers. Rob, thanks for your time.
Rob: Thank you Kevin.
Terry Ryder’s new secret weapon- Terry Ryder
Kevin: Infrastructure development is, of course, the most powerful creator of capital growth in real estate. Whether it be transport, medical, or educational infrastructure, the development of such factors is a potent, economic driver. It generates business activity and jobs, which creates demand for real estate.
Terry Ryder, from HotSpotting.com.au has created the National Top 10 Infrastructure Hot Spots for 2014. In that report, he says, arguably the most powerful is transport infrastructure. In transport infrastructure, there are three R’s. What are they? Let’s find out. Terry Ryder joins us. Good day, Terry.
Terry: Hi, Kevin.
Kevin: What are the three R’s?
Terry: The three R’s are real estate roads, rail links and river crossing, which could be bridges or tunnels.
Kevin: I can understand why you would have called it river crossings. It wouldn’t have been three R’s without that.
Terry: That’s right. The best kind of transport infrastructure I think is probably the single most powerful creator of growth in real estate. Not only does it improve the amenity of an area by making it more accessible, but the construction of that kind of infrastructure creates massive economic activity and jobs.
Kevin: Interesting too, Terry, is that one of these reasons that a lot of these areas that are now merging weren’t hot spots because they weren’t all that accessible to the major shopping centers in CBD – but that infrastructure has actually brought them in closer?
Terry: That’s right. A current example that’s now on the boil is the Redcliffe peninsula of Brisbane, which has been promised rail links for 40 or 50 years, and now it’s finally happening. I think it’s going to give that market a tremendous boost.
Kevin: You point out in the summary part of the report – and correctly too – that both residential and commercial real estate can benefit from infrastructure developments in transport.
Terry: That’s right, particularly warehousing type, industrial property warehousing and logistics businesses that are in that part of the economy. They need to be where the major motorways are. Often you’ll find in the major cities of Australia are located where there’s an intersection or two major motorways.
That also has an influence on residential property because people like to live close to where their jobs are. The fact that you’ll find industrial type property, warehousing and logistics relocating, following upgrades of motorways, for example, or creation of new ones, the jobs will follow and that will influence where people choose to buy.
Kevin: We will tell you how you can get your hands on this report in just a moment. There’s a special offer that Terry is going to make as well. Terry, I wonder if you could just tell us, because infrastructure is happening all around Australia, are there any states that stand out that may be doing more infrastructure development than other states?
Terry: I think right now New South Wales, particularly Sydney, is spending a lot on infrastructure. We had a long period under previous state governments where there was very, very little spending on infrastructure. I think that’s a major reason why Sydney has been the underachiever of the capital city property markets over the last ten years, until last year. But I think the big difference that we’ve seen recently is that money is now being spent on infrastructure.
We now have the northwest rail link happening. We’ve got a number of major motorway projects in the pipeline as well. I think that’s had a huge influence in lifting the Sydney property market.
Kevin: You mentioned also in the report that Adelaide is also a bit of a standout. Of course, there has been a lot of development as well in Brisbane too.
Terry: Yes. Brisbane has been very active in construction of new transport infrastructure in recent years, including the Clem Jones Tunnel, and AirportLink – the upgrade to the Ipswich Motorway. And we currently have under construction the Legacy Tunnel, which is going to link Toowong to Kelvin Grove. All those projects have a big impact on the residential suburbs that are located proximate to either end of those projects.
Kevin: The report we’re talking about is being compiled by Terry Ryder from HotSpotting.com.au. It’s been compiled to highlight the locations around Australia which have good prospects for future capital growth through the presence of a combination of medical, educational, and transport infrastructure facilities.
How do we get our hands on the report, Terry?
Terry: You can get it at the www.HotSpotting.com.au website. On the homepage you will see a special panel which highlights the special offer price. We would really like people to be aware of how important infrastructure is in creating growth in real estate. I think it’s the single biggest influence of all the influences. We’re offering $50 off the normal price so people can get their hands on that report more cheaply.
Kevin: It’s well worth it. Go to the website www.HotSpotting.com.au. Terry Ryder, my guest. As always, great talking to you Terry. We’ll catch up again soon.
Terry: You’re welcome, Kevin.
Buying property in a minors name- Ken Raiss
Kevin: We’ve got a question on the show now from Kim. I’ll read it, because Ken writes from Chan and Naylor, joining me now. Hi Ken, how are you doing?
Ken: How are you Kevin? How are you, listeners?
Kevin: Good, mate. It’s nice to be talking to you again. Let’s address this question for Kim.
Kim is a self-funded retiree, and has no taxable income, and therefore does not lodge a personal tax return. Kim purchased an investment property, which was a house, which produces a small net income.
Kim’s accountant says that she should get a quality surveyor to assist the property so that she can claim depreciation. She doesn’t see the need for this, since the property will not produce a taxable income for as long as she is lucky to own it. It would seem more sensible to her to minimize capital gains tax when she sells it by not claiming depreciation.
Let’s get Ken’s view on this. What do you think, Ken? What advice would you have for Kim?
Ken: Great question, Kim. Two things. You say no taxable income, so that could be money coming from a superfund, obviously, which is not taxable in your hands. In the 2013-14 year, there is a tax-free threshold of $18,200. That answers that first part.
But when we’re looking at the depreciation, there are two categories of depreciation. One is on the buildings (they call that the capital works) and the other one is on the fixtures and fittings.
Now, the fixtures and fittings, when you sell a property, the ATO accepts that the sale of the fixtures and fittings are done at the written-down value, so there is no tax implication in relation to capital gains on the fixtures and fittings.
However, on the capital works, which is the depreciation on the building itself, the ATO requires you to add back what you have claimed. This effectively reduces your cost, which increases your profitability.
I think if we look at those two individually, it does make sense, maybe if you don’t have a taxable income, to not depreciate the capital works, because it doesn’t really create you a benefit.
But I would look at depreciating the fixtures and fittings. What would happen is you could go into a small taxable loss because of that depreciation, which would then reduce the capital gain on the sale of the building. You actually get a benefit if you do the fixtures and fittings, as opposed to the capital works.
Kevin: That certainly makes a lot of sense. Kim, I’m sure you can take that information across to your accountant. If you need any more information on that, you could contact Ken and his team at Chan and Naylor. They’re the people we always turn to for advice on these matters.
Ken, just before I let you go, I’ve got another question. This one is from Joe. Joe wants to know whether or not he can buy an investment property in his eight-year-old son’s name. What’s the best way to do it? What would be your advice there, Ken?
Ken: Be very, very careful. Because your child is a minor under 18, they can’t legally sign contracts. You, as their legal personal representative, could certainly buy it in their name.
But the problem is, for income from that property (the rental income or the capital gain) the tax is at the minor’s tax rate, which is 66%. There would be a huge tax in cost for the next ten years on that property. You’d want to be very, very careful on why you would do that.
If there are some issues with people being on disability, or if there’s issues with a family breakup and one spouse is helping, there are things like Child Maintenance Trusts that create a completely different tax scenario. But as a normal investment, you’d want to be very, very careful.
Kevin: Ken, thank you very much for time.
Ken: My pleasure, guys. Bye for now.
A new way to find property- Jason Spencer
Kevin: You may or may not recall some years ago there was a website called StreetAdvisor. We did something on our program about that some time ago. That’s now slightly changed. StreetAdvisor still runs overseas. We’ll find out a bit more about that more in just a moment, but it’s morphed into a new site which is called www.Homely.com.au. Joining me is the man behind that, Jason Spencer. Jason, thanks for your time.
Jason: Thanks, Kevin. It’s great to talk to you.
Kevin: It’s great to be talking to you again. Tell me what’s happened in the last few years with the progression from StreetAdvisor to Homely?
Jason: Seven years ago we launched a website called StreetAdvisor in San Francisco and Australia. It was set up to rate and review every single street and suburb and neighborhood in the world initially. To date, we’ve had over one million ratings, reviews and local discussions, and in Australia over ten million people have now visited us.
In December, we launched a new site called Homely, which builds on top of our existing community and adds homes for sale and rent across Australia. We’ve morphed that existing community into Homely, adding over 150,000 listings in just a few months, and just over 2500 real estate offices have signed up already.
Kevin: What would you say your reach is around Australia for those looking at maybe buying or selling a property?
Jason: We’ve got coverage in most suburbs. I’d say it’s approaching 90% coverage, but there are always some harder areas. I’m always surprised to see reviews Far North Queensland. Bottom line: if you’re looking for, say, the best suburbs in Brisbane, Queensland or Melbourne, usually Homely will come up number one with a list of all those ratings and reviews.
Kevin: So you’re in the major capital cities – Brisbane, Sydney, Melbourne?
Jason: Everywhere. Obviously from a search engine’s perspective when you go to Google, you’re going to find the major cities very easily, but you would be surprised. I was just typing in yesterday “best streets in Muchea” and Homely had a bunch of information on there.
Kevin: For someone selling a property – we know of the major portals – is it an option for them to also be on Homely or do you see Homely taking over from the others?
Jason: Definitely. At this stage, Homely is 100% free to list for agents, but we see Homely as obviously being very different. We have the largest community of its kind of people looking for where to live. But secondly, Homely is all about creating a very beautiful consumer user experience – one that you’ve probably never seen before in Australia based on our seven years of U.S. experience.
It’s the first that has no banner ads, and the first that has no page turns back and forth. It really is amazing when you browse homes without banner ads that we’re all so used to. It’s such a refreshing experience. There’s nothing to lose, it’s 100% free to list, and we’re finding a lot of people wanting to list their homes, and in fact asking their agents to get their homes onto Homely.
Kevin: And at the end of the day you’ve got to have a model that’s going to make some money, so how will this be monetized in the future?
Jason: We’re very different in terms of the way we monetize. Of course, we are 100% free to list, but we also have what we call a “Homely Pro Package” and that’s a very unique marketing platform that we’ve developed for the United States market. It helps agents engage consumers, homebuyers and renters through what we call “local expert profiles”. That’s all about building engagement. And in-line with helping people find where to live, agents can earn points for answering consumer questions, writing reviews or uploading photos, and it really helps agents interact with consumers to put them in the right position as the premier agent in that area.
Kevin: It’s a bit of a win-win really when you think about it. We’ve got agents who want to reach consumers and consumers who want the information, so you’re really bringing the two together. You’re fulfilling both of those needs.
Jason: Definitely. That’s something we’ve seen over last seven years. It’s been trial-and-error, but we got there in the end.
Kevin: So someone looking at buying (or particularly selling) should contact their agent and ask them to have a look at Homely?
Jason: Definitely. Listing on Homely doesn’t cost them anything and we’re connected with most of the multi-loader software companies in Australia so it’s very easy to get your listing on there.
Kevin: What does that actually mean? Just explain that for a consumer.
Jason: Every real estate company has their own software and they integrate with www.RealEstate.com.au to get the listing from that software into the real estate search site. Homely is now also integrated with many of those software packages.
Kevin: What that means is if I list my place with Raine and Horne, Ray White, or whatever it’s easy for them to not only load it on those other major sites, but also get it onto Homely.
Jason: Yeah. In fact, it’s good that you mentioned that. We’re already live with Ray White, Raine and Horne, and L.J Booker – most of the major ones.
Kevin: Wonderful stuff. It’s called Homely. You’re going to hear a lot more about it and I suggest you go and have a look at it. It’s a great site. We actually had a look at that and rated our suburb some years ago, and I’m pleased to see that it’s still there. A lot of people have followed us and made comments about it too.
It takes looking for or selling a property to another level where you get to really know the suburb before you actually buy in there, and that’s one of things that in this show we really suggest you really need to get to know that suburb first. So check it out. It’s called www.Homely.com.au. My guest has been Jason Spencer. Jason, thanks for your time.
Jason: Thanks, Kevin. Thank you again.