Location score by Empower Wealth

Thanks @DSR , may be I will think of giving it a try...

 

The key with the DSR data though is knowing how to overlay fundamental research on top of the data.

Please note that this opinion is my own and doesn't represent the opinion of Empower Wealth.

 

Thanks @Jake Milne . Being a naive, I would really appreciate if you could detail a bit on your statement "how to overlay fundamental research on top of the data. " Thanks!

 

If I may oversimplify Nish; fundamental research consists of learning what reasons that will attract both more people and more money into an area.

Example topics are:

1. Jobs/ Income:

The creation of new jobs or a shift into higher incomes
(How will property prices rise if incomes/ affordibility don't improve?)​

2. Congestion/ Travel:

The creation of new infrastructure or already existing infrastructure and its desirability (Where is it going to and how long does it take to get there?)​

3. Goods/ Services:

The creation of new amenities or the availability of diverse amenities
(What do people need to live happily and are these things available?)
​

Having a product like location score is a good way to sift through the majority of poor suburbs. Having an understanding of your shortlisted suburbs' fundamentals is a good way to confirm/ reject the data.

Despite a lot of helpful resources such as Microburbs, SQM Research and the ABS Census, there's no easy way to gain all of the fundamentals through a computer.

If you want to be a successful investor it'll take a good chunk of time exploring your shortlisted suburbs to build up a realistic picture ("on the ground") of what the data is suggesting.

 

Hi @Nish,

I subscribed to LocationScore to try it out.
I am not arguing about the validity of the data, but I just find it very limited to help you in your research.
All you can do is get the best rated suburbs (like the 200 best from memory), or analyze all the thousands of Australia' subs one by one.

So it is good to confirm some of your shortlisting, but it is not the best tool to actually perform your shortlisting...

Where I found the benefit was in reviewing my current portfolio

All those data analytics are great, but I reckon the best way is still the traditional way:
* look at the macros (employment, income, migration, infra, ...). 'Old' census data are ok
* Narrow down an area (based on the above, diversification of your portfolio, land tax consideration, stamp duty, ...)
* Get the best buyer agent of this area and let him do the leg work.

my 2 cents ...

 

Hi @Jake Milne , sorry I missed your reply last week. thanks a lot for putting through the information here. Is it possible for you to please point out to some more tools which could help in researching what kind of infra is coming and where or other factors required to be learned for property investing by myself. I understand that it is a slow process and one cant be master of it in one go but at the moment Sydney boat is missed and with existing investment property not grown much, I dont want to fall victim to a wrong choice for my next. Can't afford a BA at the moment. Thanks!

 

Hi @JuliaCFA , thanks for your response and feedback on the tool. I agree that deep research is still the way to go. With so much confusion around, I will try to figure out the next steps for myself. Would really appreciate, if you could please point to some tools to begin with analysis of different factors involved in property investment.

 

Podcasts:
The Property Couch
Smart Property Investing

Books:
More Wealth from residential property by Jan Somers
The armchair guide to property investing by Ben Kingsley & Bryce Holdaway
How to grow a multimillion dollar property portfolio by Michael Yardney
Investing in Real Estate for Dummies
The Effortless Empire by Chris Gray
The Real Deal by Kelly & Buckingham
47 Biggest mistakes made by property investors by Helen collier-kogtevs
Think & Grow Rich Property by Stuart Zadel
etc etc

Check out more of property chat and somersoft.com.au


DATAHOUSE
http://www.myrp.com.au/
Pricefinder – Property Data & Analytics | Australian Property Monitors | Property Data Solutions
Residex - Australian Property Market Experts - Residex
Get a free property report with price estimate and history

FEDERAL
Budget 2018
http://www.dfat.gov.au/geo/fs/vic.pdf
http://www.treasury.vic.gov.au/CA25713E0002EF43/pages/publications-dtf-annual-reports
http://brendanoconnor.fahcsia.gov.au/node/18
http://www.immi.gov.au/skilled/
http://www.immi.gov.au/media/research/surveys/csam/
http://www.ato.gov.au/individuals/content.aspx?doc=/content/12333.htm
https://www.moneysmart.gov.au/?referrer=fido.gov.au&openDocument

STATE
http://www.treasury.wa.gov.au/cms/index.aspx
http://www.treasury.tas.gov.au/
http://www.treasury.sa.gov.au/
http://www.treasury.qld.gov.au/
http://www.treasury.nsw.gov.au/Publications_Page
http://www.treasury.act.gov.au/snapshot/
http://www.land.vic.gov.au/

REI
http://www.reiv.com.au/
http://www.reiact.com.au/
http://www.reinsw.com.au/
http://www.reint.com.au/
http://www.reiq.com/
http://www.reisa.com.au/
http://reit.com.au/
http://reiwa.com.au/home/default.aspx

NON-PROFIT
http://econ.worldbank.org/WBSITE/EX...165236~piPK:64165141~theSitePK:469372,00.html
http://www.oecd.org/
http://www.bis.org/
http://en.wikipedia.org/wiki/List_of_Australian_states_and_territories_by_gross_state_product
http://www.sqmresearch.com.au/index.php

PRIVATE
http://dnb.com.au/Header/News/index.aspx
http://dnb.com.au/Header/News/index.aspx
http://economics.hia.com.au/factsForecasts.aspx
http://www.moodys.com/researchandratings
http://www.miningnews.net/
http://www.miningmonthly.com/
http://www.manmonthly.com.au/home
http://www.udia.com.au/index.htm
http://www.masterbuilders.com.au/
http://www.buildingcommission.com.au/www/html/139-introduction.asp
http://www.mortgagechoice.com.au/home-loans/advice.aspx

BANKING
http://www.westpac.com.au/corporate-banking/research/property-market/
http://www.anz.com/corporate/research/australian-industry-economics/australian-property-research/

RBA
http://www.rba.gov.au/monetary-policy/inflation-target.html
http://www.rba.gov.au/chart-pack/pdf/chart-pack.pdf

ABS
http://www.abs.gov.au/AUSSTATS/[email protected]?OpenDocument
http://www.abs.gov.au/ausstats/[email protected]/mf/6202.0
http://www.abs.gov.au/ausstats/[email protected]?OpenDocument
http://www.abs.gov.au/AUSSTATS/[email protected]&Action=expandwithheader&Num=1
http://www.censusdata.abs.gov.au/ce...nsus/2011/quickstat/2?opendocument&navpos=220
http://www.rba.gov.au/statistics/frequency/commodity-prices.html
http://www.abs.gov.au/AUSSTATS/[email protected]=productsbyCatalogue&Action=Expand&Num=10.1
http://www.abs.gov.au/AUSSTATS/[email protected]=productsbyCatalogue&Action=Expand&Num=3.1
http://www.abs.gov.au/AUSSTATS/[email protected]=ProductsbyCatalogue&Action=Expand&Num=9.4
http://www.abs.gov.au/AUSSTATS/[email protected]=productsbyCatalogue&Action=Expand&Num=10.1

IMF
http://www.imf.org/external/ns/cs.aspx?id=28
http://www.imf.org/external/pubs/ft/GFSR/index.htm
http://www.imf.org/external/datamapper/index.php
http://www.imf.org/external/country/AUS/index.htm
http://www.imf.org/external/pubs/ft/reo/reorepts.aspx

 

Wow, thats amazing information. Thanks @Jake Milne

 

G'day all,

If I could weigh in on this conversation.

We always welcome feedback to continue to build our research offerings, so I'm really keen on who has a better 'structured methodology' for identifying areas fast right across Australia?
Anyone game enough to put their real names and to show us all how they do it?

As someone who does put their 'research calls' into the media - I was wrong about how much Sydney had left in it latest run - The DSR theory that drives LocationScore had it right, as it often does. We created LocationScore to a very cost effective and quick way to drive people to the right markets.

Furthermore I'd be very sceptical of any FREE offerings in this space in terms of the data collection and accuracy and upkeep. You need to ask yourself why do they give it away for free - what are they selling?

Once again - We welcome any feedback to help improve to tool and the future products are are building for all property investors

Cheers,
Ben

 

Hi Ben and Jeremy,

Thanks for taking the time to put your feedback on this forum. I can see Locationscore website and then there is www.dsrdata.com.au and the pricing on this is (lite version is 193 / month and DSR+ (pro version) is 443 / month.
Where as LocationScore pricing is 97$ QUARTERLY.
1) Is LocationScore is rating same as DSR score rating ? If yes, then locationscore pricing is what everyone will pick. Can you please clarify ?

2) DSR+ as you see is more expensive subscription than DSR (more than double the price of DSR) Are we getting the double research metric for this? As property itself is an expensive transaction paying 443/ month may be fine for someone, but wanted to understand what better value does DRS+ gives than the normal DSR subscription?

If Jeremy can clarify this that will great !

Thanks in advance !

 

Hi KK_Kris,

1) LocationScore is the same as the "basic" DSR. DSR Data offers more advanced search features than LocationScore.

2) Pro membership includes the "DSR+" which considers 17 indicators: 9 advanced indicators and the 8 of LocationScore.

The major differences between DSRdata and LocScore are:

• LocationScore doesn’t allow you to see Context Rulers for each statistic in the Suburb Analyser. It only shows a context ruler for the LocationScore
• LocationScore doesn’t have any of the advanced statistics such as the DSR+, REP, MCT, NPB, U2H, etc. which come with Pro membership on DSR Data
• LocationScore doesn’t allow you to search for top markets using your own criteria like budget, yield, etc. The DSRdata Market Matcher does.
• LocationScore doesn’t have a Market Monitor - admittedly not a huge draw-card though.

The big deal with the Pro version of DSRdata is that it includes the DSR+ which is the best measure I know of to pick growth markets. Compared to past performances of experts and other algorithms.

If using the DSR+ instead of LocationScore for research meant getting an extra 1% growth on a $500k property and only for 1 year after purchase, then it would be worth $5,000. Historically it has a greater than 90% chance of outperforming the national average growth rate for the first 3 years.

LocationScore was made deliberately cheap and easy, largely to help investors avoid disaster areas. DSR Data was made to help investors short-list locations worthy of further research.

 

Good to see companies taking on feedback to improve services

 

No takers for better research calls? We did some back-testing on some of the predictions from LocationScore from the past few years. Outperformed the Capital cities, national market and very much outperformed the regional markets. To see our back-testing video visit the site for proof.

Always looking to benchmark against any better research tool. You tell us what they predicted and when and we'll put LocationScore up against it to see who got the best capital growth.

Also any suggestion to improve the tool, let us know.

All the best for the festive season.

Cheers
Ben

 

By the way - LocationScore isn't created by Empower Wealth.

Empower Wealth is a specialist property advisory firm, where investors seek help to get professional investment advice.
LocationScore is a DIY research platform co-created by Jeremy Sheppard (the Capital Growth King), Bryce Holdaway and myself, to help investors find the better locations to buy in.
There is no direct relationship/link with EW.
Just want to clarify this, as there is some new research products that will be research very soon, using Jeremy's Sheppard's thought leadership very clever algorithm

 

Hi all
Just reviving this interesting forum thread around data. I love data in my full-time job and hence have always been interested in DSR or LocationScore, BoomTown etc. I haven't signed up for any of these services recently and used REInvestar along with some basic due diligence free tool to chose my last property. After that I cancelled my subscription as I don't need to be searching for another suburb in the immediate future.
Comments aside, my question is the following:
- In RE Investing 101, capital growth strategy with a buy-hold and a long term view (20+ yrs) seems to be the way to go for most property investment advice. Some of these tools are focused on the current market conditions and obviously the immediate future capital growth if I understand this right. DSR+ has a Long Term (10 years only) metric but still obviously doesn't help with the "recommended strategy". Am I missing something here, are we saying that these tools will help you invest in properties with a good DSR score for some near term capital growth, but couldn't this be at the cost of potentially long-term capital growth (20+ yrs) as it may be ignoring the fundamentals (population growth, jobs, income, location near city etc)?
I feel that it could be misleading people into buying properties with a good DSR+ for immediate future capital growth, however this could be at the cost of long term growth which is really the wealth building strategy isn't it? I think that it could potentially even get people more confused with so many options and get into analysis paralysis ... or not even consider other suburbs that have the fundamentals for long term growth just because they happen to be on a good current market (good DSR)?
Am I missing something here? Could anyone shed any light?
Thanks and have a great weekend!

 

Hi tiagodanda, I'm the creator of the Demand to Supply Ratio (DSR).

Firstly, a clarification: the Long Term Growth (LTG) published on DSRdata.com.au and incorporated in the DSR+ algorithm is a measure of growth over the last 10 years, not a prediction of growth for the next 10.

Secondly, yes the DSR is only good for short-term growth, about 1-3 years.

Thirdly, I'm not aware of any method or expert capable of picking medium to long-term growth winners with consistency. None of them have a track record of success since none of them have been around long enough. They need to wait 20 years to examine the performance of their long-term picks made 20 years earlier. They learn from those mistakes and make better long-term picks for the next 20 years. So you need 40 years of history to prove you've learned from the 1st 20 and now know how to pick 20-year winners after only one learning experience.

What's more, my analysis of the last 28 years of capital growth for all suburbs around Australia shows that none of the typical "fundamentals" claimed to be relevant to superior long-term growth have serious validity (e.g. population growth, incomes, proximity to the CBD, etc.)

On the contrary, the data suggests that over the long-term, all property markets within major cities tend to have the same performance. Their per annum growth rates converge towards the long-term average. It is only over the short-term that property markets differ significantly. The odds are therefore heavily stacked against investors picking long-term winners.

BTW, over a 100 year period, cities have outperformed regional markets as jobs moved from agriculture to manufacturing and then retail, banking, etc. Mining being the only exception. John Lindeman has some good analysis on extremely long-term growth if you're interested.

The good news is: if you have long-term plans, buy in a major city and don't sweat too much about where or when you buy. If you have short-term plans, it's relatively easy to pick winners over the next 1-3 years.

Rgds,
Jeremy Sheppard.

 

Hi Jeremy (@datageek)
First of all, thanks for taking the time to reply to this forum in your busy time.
Second, don't get me wrong I'm a big believer of data-driven research and I also consider myself a data-geek and have read your work in the property magazines and have always maintained interest in your work which I think it is gold.

The comments you made in this post are extremely interesting though, especially in a few sections quoted below.

Now, what this is really interesting is because this is related to a parent topic of EmpowerWealth and the great work behind @Ben Kingsley and Bryce Holdaway which I'm a great fan. In the last two weeks I've discovered their podcast, I have finished their MoneySMARTS book, already implemented the system, and am now 50% into the Armchair Investor Guide book. I've also listened to over 20 podcasts in these last two weeks which I find extremely valuable.

This morning, I was listening to an older podcast episode 202 Episode 202 | We warned you to Prepare for Winter… Did You? - The Property Couch which at around minute 60 of the podcast Ben talks about the Speculator Investor and the Trader Investor, which are investors that are chasing gains in the short term 1-2 years and 2-5 years respectively. They also re-assure that their strategy is based on strong income and population growth which in my mind is mostly capital cities.

With all of these facts stated, what's interesting is that you are partners in the LocationScore website and I'm not sure if I'm missing something here or there is some misalignment in strategy and data-driven research between your work and the work Ben & Bryce offer.
As a matter of fact, I'm considering doing a property portfolio plan with Empower Wealth hence the interest and the effort to write this post.

Are you able @datageek Jeremy or @Ben Kingsley Ben to elaborate more on the strategy around using LocationScore to achieve capital growth based on Ben's & Bryce's books/podcasts ? I understand that data on its own is not strategy, but I'm interested in how to join the two tools & strategies to obtain wealth creation in the long term. Any thoughts or feedback Jeremy / Ben?

Thanks once again for taking the time to post here.

 

Fair point Tiagodanda.

You've probably noticed on PC that property investors have loads of opinions. Ben, Bryce and I do too. We agree on most things. Where are opinions overlap is where we believe we're at our combined best.

To answer your question, I would suggest investors choose markets according to B & B's advice and then use the algorithms to time entry.

As a bonus I would also use the algorithm to time exit. But that's not for everyone and there's certainly nothing wrong with set-n-forget, if you pick well to begin with.

P.S. I forgot to mention in my previous post that as a general rule: houses tend to outperform units over the long-term, especially houses on larger blocks. Choosing houses in built-up areas of cities should work well long-term.

 

For those who have used it, does it show historical dsr score for suburbs over time? Or does it only show dsr at a point in time?

Keen to identify suburbs with upward trending dsr