Dan Johnson's The Investment Property Blog Blog

At the increasingly less tender age of 34, I may not be the oldest person in the property industry, but Ive bought properties in three different continents and have been running TheMoveChannel.com for the best part of a decade, so I know a thing or two! Im not shy of learning new things though, so join me as I travel the world, guide the business through the current economic storm and educate myself on the fundamentals of investing in property.

12 Reasons to Invest in Echo Beach, South Australia

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Tuesday, July 06, 2010

Echo Beach, Australia

1. Ownership of real estate
This is not a fund or a share scheme – investors will own an interest in unencumbered real estate.

2. Absolute beachfront position
Limited availability leads to higher long-term demand and higher gains for investors.

3. An area that already attracts tourists
Stunning beaches and great location between Adelaide and Melbourne on the popular great coast road.

4. Steady and sustained capital growth
Historical trends show a consistent growth of 10 to 15% per year in land prices in this area.

5. Land already has planning approval
Current planning approval is already in place for this site, for residential use.

6. Accelerated upside potential
Enhanced approval for this site to be used as a resort would increase ROI to between 500 and 1000 percent.

7. Vendor is sharing investor risk
The vendor will retain a 25% interest in Echo Beach, meaning he has a vested interest in the success of the venture.

8. Low entry price paid in sterling
Surprisingly affordable prices, ranging from £15,700 to £29,700.

9. Guaranteed minimum return
Investment return of 5% compounding on investors' entry price is guaranteed by Vendor's retained 25% share of the land!

10. Clearly defined exit strategy
If after 5 years resort approval is not obtained, Echo Beach will be sold as a whole, with the return of capital based on each investor's ownership interest.

11. No lockdown!
Investors are free to sell their interest in Echo Beach at any time.

12. Refinancing potential
If enhanced planning is approved every investor will have separate title to their allotment which can be refinanced to release capital.

Click here for more information on this opportunity

10 tell-tale signs your neighbour is a spy

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Wednesday, June 30, 2010

Anna Chapman - James Bond - Spy Photos

Everyone likes a good spy story and frankly I'm no exception. Let's face it: coded dead-drops and covert communications are cool. So when news broke this week that a ring of Russian spies had been arrested in an FBI sting operation, I was as intrigued as the next guy. Except this time, for me, the story was a little different...

It turns out that one of the alleged spies arrested - Anna Chapman, the headline-hogging so-called "femme fatale" of the American media - was an acquaintance of mine. Not exactly a lifelong friend, but with sufficient ties to warrant a number of calls from journalists looking to flesh out the detail of her time in London - to date, I've spoken to reporters from The Daily Mail, The Sunday Times, Forbes, the Daily Telegraph, The Washington Post and The Wall Street Journal, The Globe & Mail, Channel 4, CBS News, People Magazine, Global Edge, Associated Press and Inman News. Phew!

Fortunately, deciding whether or not she is any more than an innocent pawn in some grand global conspiracy will be left to others; it turns out that in spite of the time I have spent in Russia, spotting the signs of soviet-style espionage is apparently not a forte of mine.

So to make sure we can all sleep easier at night I thought a little bit of research was in order, to brush up on how to spy a spy when there's a spy to be spied. An avid fan of BBC's Spooks, my first port of call was of course MI5, who helpfully explained that there are 2 types of spy we should be on the look out for.

An officer is a person who is a member of an intelligence service. In some cases they may operate in "deep cover" under false names and nationalities. Such spies are dubbed "illegals" because they operate without any of the protections offered by diplomatic immunity.

In the UK, an agent, more formally known as a "covert human intelligence source," is an individual who clandestinely provides information to an officer. He or she will probably not be a professional "spy" but may have some basic instruction in espionage methods. An agent may be motivated by a wide variety of personal or ideological factors.

So to recap and de-clarify:

In the UK, a spy is a partially-trained, amateur agent who is good at disguises and sometimes supplies information to an officer. Officers are also spies, but of an altogether more professional nature. Though they may also be known as illegals, officers are not to be confused with immigrants, who are people that don't have the right visa documentation to live and work in the country. Those people may also be referred in some quarters as illegals, but they are definitely not spies. Well maybe the odd one. But not as a general rule.

Meanwhile in the US, spies are informants who supply information to agents. These agents are not like the ones in the UK - who are spies - these are in fact government officials who don't do any spying themselves, though they do regularly meet with covert human intelligence sources. I'm not quite sure whether they do this publically, in secret, or in disguise, nor whether they discuss their various assets or whether those assets may or may not also be people. Or spies.

Anyway, it's all a little confusing and I can't help wondering if the security services around the world would have an easier time of it if everyone was just a bit clearer about their job title...

So if business cards and job titles can't be relied upon to identify a spy, what other options are there?

Below are a number of things that I think you could look out for if you think that your neighbour, associate or colleague may in fact be a spy:

1) They are always wearing the most convincing outfit at a fancy dress party.

2) "Working away" frequently, they tarmac over their lawn to "keep it manageable".

3) When you excitedly show them your brand new iphone 4, they can barely conceal their contempt for your pathetic little toy.

4) Their sense of humour is epitomised by t-shirts adorned with slogans such as: A weapon unused is a useless weapon.

5) Their house has recently been adorned with a satellite dish somewhat larger than those fitted by Sky Digital. And you know they don't like sports...

6) Their computer is the only one in the office that never gets a virus.

7) You talk casually about the weather. They rant about the injustice of farming subsidies in South America and how forced regime change would bring an end to the suffering of millions.

8) After a suspiciously long lunch break you catch them changing out of a wig before coming back into the office. And it has happened more than once.

9) When reluctantly persuaded to give you a lift home, they bundle you into the boot, drive dangerously fast, run 3 sets of red lights and instinctively change lanes every 5 seconds before finally going round the block 3 times, letting you out and curtly apologising.

10) After a "night out", they get dropped off by friends. In a helicopter.

So be on your guard. Without even realising it, you may be living next to or working with a spy. And you wouldn't know it - after all, that's the thing about spies, they're terribly hard to spot!

The Future of Property Portals

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Friday, October 09, 2009

When the leaders of an industry get together, everyone tends to think a lot about strategic direction, as well as spending a considerable amount of time developing new relationships and strengthening old alliances. This was very much the case at the Property Portal Watch Workshop in San Francisco, where the heads of around 30 leading internet property businesses from around the world met to dissect, discuss, and dispute the state of the market. So what were the key issues that were discussed?

What do users really want from a property portal?
Bigger is not always better when it comes to the size of the property database. The relevance of the listings to the search of the customer is more important than absolute numbers, while the speed and accessibility of the search tools are extremely important when it comes to turning first time visitors into loyal users. Portals that are designed with too heavy a focus on Search Engine Optimisation almost always suffer in terms of usability.

Is Google a friend, foe or frenemy?
Although not its number 1 priority, Google is getting increasingly serious about the real estate sector. The combination of Google Maps, Google Local and Google Base means that many portals now regard the search goliath as a genuine long-term threat to their business. However, Google faces an awkward dilemma, as any attempts to push its own (free) listings services could have serious ramifications for its ability to monetize search results through Adwords. Even if it finds the right formula, agents and developers will need to remember that portals will always be valuable in terms of generating leads, as Google will only create clicks and traffic to your website, which still needs to convert these visitors into leads.

Which online business models work best?
Most property businesses have one of two different mindsets when it comes to advertising performance and are looking either for lead generation efficiency or brand visibility. Historically, the focus has been on winning instructions from vendors, so strong branding has been important.

However, the recession has driven down budgets, so there is an increasing focus on achieving better marketing ROI, which is making it harder for the mid-ranking portals to justify high monthly charges that sometimes generate little or no return for the advertiser. At the same time, more companies are prepared to try cost per lead advertising as it represents a lower risk alternative, but without a high lead volume, it is difficult for portals to sustain this model.

Free to list websites are currently the darlings of the estate agent world, but there are question marks as to how sustainable these models are in the long term; nothing is ever free, there is always a cost...

How can leaders exploit their market position?
A dominant incumbent enjoys a significant level of power and is able to dictate terms to its customer base quite aggressively. To a point, it is able to force up prices, impact budgets and starve competitors of revenue. With market share also comes market intelligence and the leader enjoys a greater awareness of the trends affecting customers than any other participant.

What does the future look like?
The modern world is always changing fast and the current economic situation has accelerated some of these changes. Print media have been ailing for some time, but the recession has sounded the death knell for many magazines and other paper publications. To survive, publishers need large economies of scale and a multimedia strategy.

Banks and governments could become an important customer group. With a strong global swing towards repossessions and government ownership of banks, these two sets of institutions now own a lot of property...

The portal industry is not at all developed in emerging markets. Even in techno-friendly Brazil, only 25% of the property listings currently online are listed with one of the domestic portals. 85% of all property on the market is not listed on the internet at all. These markets therefore represent a huge untapped potential.

For all its popularity, mobile doesn't really drive a lot of business. Of those portals that have chosen to focus on this digital distribution platform, the average seems to be around 1% of total visitors accessing their services via a handheld device. Generating a positive return on investment in the short term therefore appears to be difficult.

The Day I Met Gary Player

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Thursday, July 16, 2009

I haven't really met too many superstars in my life. As a cub scout, I once handed the queen a bunch of daffodils on her birthday, but that's not really the same thing. Particularly because that day was somewhat marred by a nasty rash caused by daffodil sap resulting from a friendly bit of daffodil jousting... Anyway, on Monday, I had the great pleasure of meeting a genuine golfing legend - Gary Player - at the Harlequin Hotels and Resorts launch event for an impressive project called the Marquis Estate in St Lucia.

For those of you not familiar with his record, this is a man who won an incredible 164 titles in a long and illustrious career. His haul included 9 major titles, making him one of only 3 players ever to win all 4 different major events. That feat puts him right up there with Jack Nicklaus and the modern phenomenon that is Tiger Woods.

For several hours on Monday morning, Gary warmly hosted group after group as they made their way to the par 3 4^th hole at The Grove hotel & golf complex near Watford. "Glorious Day," he chirped as we made our way towards his entourage. "Shame the golf is not so glorious," was my instinctive response, remembering my duffed tee shot in front of an audience at the first. "Beats being in the office," was his 100% correct response.

For 5 minutes on the tee, we chatted, asked questions and had our photos taken. Gary explained that for the first time he could remember, he wouldn't be heading to the British Open, which starts this weekend, as he would be heading off to Bulgaria, to check on progress at Thracian Cliffs, one of his courses currently under construction there.

For a 74-year old, Gary Player has a tremendous energy about him and he still possesses great power and accuracy with a golf club - his ever-reliable swing with an 8-iron plopped his ball comfortably closer to the pin than anyone in our group. The great man was less than impressed; he said it was the worst shot he'd hit all day. Lucky him...

I hadn't fared quite so well, thinning my ball with some venom and skirting dangerously close to the water hazard that protected the green. Obviously this was a deliberate ploy that would result in my being the beneficiary of some personal advice from the man himself. By way of demonstration he showed me how my flat footedness had led to my watery adventure and gave me a pointer for correcting the problem.

Enthusiastically encouraging me to show him my improved swing, he seemed delighted that I had been able to assimilate his tip and quipped that he wished his wife listened to him as attentively. I'm sure he was only joking though, he's been married to his wife Vivienne for more than 50 years and together they have 6 children and many more grandchildren.

A phenomenally successful golfer, Gary Player has now turned his attention to golf design and real estate development. His course at the Harlequin resort in St Lucia will be the latest of nearly 300 to bear his signature. Only a very small number have Gary Player real estate associated with them and this will be the first to have a hotel that carries his name.

It was a great pleasure to meet him and his mantra, repeated below, is certainly one from which I think everyone in business can learn something:

1. Change is the price of survival.
2. Everything in business is negotiable, except quality.
3. A promise made is a debt incurred.
4. For all we take in life we must pay.
5. Persistence and common sense are more important than intelligence.
6. The fox fears not the man who boasts by night but the man who rises early in the morning.
7. Accept the advice of the man who loves you, though you like it not at present.
8. Trust instinct to the end, though you cannot render any reason.
9. The heights of great men reached and kept were not attained by sudden flight, but that while their companions slept were toiling upward in the night.
10. There is no substitute for personal contact.

"The Black Knight" and his rather less colour-coordinated group of golf afficionados.

Reaching out to Russian Buyers

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Thursday, December 04, 2008

Russian Yacht

The most popular countries and property types searched for by Russian buyers are not necessarily the ones that you might expect. We have recently been doing some analysis of search volumes by Russian users, for our new Russian Language Property Portal and used the Russian word for "property" as the basis, a term that has around 1 million monthly searches in Russian. The results were pretty surprising.

4 countries dominated the international sector:

Term                                     Monthly Volume
Property in Spain                    8100
Property in Germany               3600
Property in Ukraine               2900
Property in Bulgaria                1600

The lower than expected volumes shouldn't be misconstrued. Deeper investigation reveals that far from indicating that the market potential is less than hoped, the online behavioral patterns reveal that destinations don't play anywhere near as big a part in the way that Russians search for property online:

Term                                     Monthly Volume
House / Houses                    2.3 million
Flat / Flats                             1.3 million
Land                                      750,000
Cottages                                330,000
New Build                               90,000
Commercial Property               50,000
Country Property                     18,000
Overseas Property                   17,000
Villas                                      15,000
Elite Property                          12,000
Investment Property                10,000

Buyers in Russia seem to be much less focused in the locations that they are searching for and much more geared towards the class of property. They know what they want, but they don't yet know enough about the different international markets to have a good idea of where they want it.

No doubt this trend will change, as the proliferation of overseas property magazines currently in publications help to educate buyers about the hottest destinations around the world.

Donald proves he wears the troosers!

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Friday, November 14, 2008

A household name the world over, Donald Trump is, as his own website puts it, "the ultimate definition of the American success story". In the world of property, he is well known for creating superb luxury lifestyle resorts and his newest project takes him to Scotland, the home of golf and the country where his mother was born.

It hasn't been an easy ride though, with widespread opposition at one stage threatening the project. Last week, it was finally given the all-clear and Trump International Golf Links, Scotland, will feature two championship-caliber golf courses and a five-star luxury hotel among other amenities, on a 1400-acre stretch of spectacular sand dunes at Balmedie Beach on Menie Estate in the northeast part of the country.

But what do the locals think? I spoke to Katherine Ellis, one time Aberdeen resident now living in London...

So Katherine, you're from Aberdeen, what's Donald going to find life like up there?

I think Donald will quite like it. It's a small place, but quite rich because of all the oil, so he'll fit in. It's got the seaside and the hills and quite a large friendly population.

Puerto Rico, The Grenadines, Florida - they're a far cry from Aberdeen. Why has he chosen Scotland for his latest project?

It must be because the people are so nice!

As well as that, there's a lot of space for golf and it doesn't take long to get from the city to the countryside. It has a royal connection too - the Queen goes off to Balmoral regularly, which is only about 50 miles away.

The airport's international too, which probably has something to do with it. You can't fly everywhere, but you can connect to London very easily - there are loads of flights each day. Oh and there's loads of heliports for the oil rigs, so I should think it's quite well-suited for upmarket visitors.

I've heard it's pretty windy and cold that far up North, is it really a good place for golf?

I'm not really a golfer, but there's quite a few famous golf courses up there. St Andrews and Gleneagles are both quite close, so it must have something that's right. The weather isn't as bad as everyone makes out. It's on the coast, but it's sheltered by the hills and it actually gets less rain than either Manchester or Glasgow.

There's been a bit of a local backlash from protectionists who are worried that the coast will be ruined. Have they got a right to be worried?

Apparently they can actually rebuild the sand dunes. Some will have to be knocked away to build the golf course, but they can be regenerated. Parts of Aberdeen beach are being rebuilt just now due to tidal wear. As for wildlife, think there's quite a lot of birds, but I should imagine they'll be quite careful with that.

It has caused something of a stir though. My Auntie lives in Newburugh, next to the golf course. Apparently one guy had a property right where the golf course was planned to be and he really didn't want to give up his family home, because he'd been living there so long. He was really concerned about the whole thing and was adamant that no matter how much money they offered, he wouldn't be budged. I'm not sure what happened, but they must have persuaded him I guess.

How will the locals cope with a big influx of Japanese and American golf tourists?

I think Aberdeen will be fine. It's already got quite a diverse cultural population and is quite international - there's an American school there already.

Where the resort will be is much quieter, it's quite a small place really. But the project will bring tourists and jobs and maybe more entertainment for the young people and so really can only be a positive thing.

As for Donald Trump, what do you know about the man himself?

Not a lot, if I'm honest. I know he's a shrewd businessman and very good at what he does.

What are his odds of finding a nice Scottish gal to become the new Ivana?

Well of course all Scottish girls are wonderful. So I don't think he'll have a problem there if he so wishes.

Do you think you would you make a good apprentice?

Oh definitely! I think I'd be perfect, though I like my current job.

One last question - what do you think Donald would look like in a kilt?

No! Oh god that's really hard! I'd like to say all men are attractive in kilts, but... well I'll just say he'd look Scottish!

Who's that Scotsman

1.5 percent rate cut: what it means for us

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Thursday, November 06, 2008

Talk about aggressive moves... Most people expected a half point cut today and some hawkish observers were pushing for a full percentage point to be knocked off the base rate. But the Bank of England has certainly surprised a few people with today's bold move to slash base rates all the way down to 3%.

As the USA buzzes with Obamania and its new-found mania, today the UK will be awash with excited chatter about how mortgages payments will suddenly become more affordable. Provided banks toe the line and cut their lending rates, many people will indeed be hundreds of pounds better off each month.

This is clearly good news for the economy as a whole and particularly the consumer sector, where people will find they have more money in their pockets and more spending power in the run-up to the critical Christmas season.

That's the positive outcome.

But there is a potential downside, particularly for those working in the overseas property sector. This stems from the potential negative impact that the decision will have on an already weakening currency.

When interest rates are cut, speculators and money-investors tend to move funds to other currencies of a similar risk-profile, where higher rates can be achieved on their deposits. For a long time, Sterling has been a better bet than the Euro, due to the higher rates payable than on the continent. Three quarters of a percent may not seem like a lot in the grand scheme of things, particularly when much higher rates can be achieved in emerging markets. But it's enough to ensure that a sizeable proportion of investors have kept funds in Sterling.

With today's news, the rate for Sterling has now fallen below that for the Euro, which has also been cut by 0.5% to a base rate of 3.25%. There's a good chance that this may weaken both currencies, as investors move funds into other more lucrative denominations, but the impact should be felt most sharply by Sterling. As these investors move out of the currency, its price will fall.

The currency will therefore weaken against others, reducing spending power for Brits abroad. Some say that this has been artificially high for a number of years, after all, why should things really be so much cheaper 25 miles away over the channel?

Any country whose currency moves against Sterling is likely to see further drops in demand from UK buyers, something which may well impact the Euro-Zone in particular. Investors looking to snap up cheap overseas properties will need to keep a close eye on the currency markets in the days and weeks ahead and make sure there money will still go as far as it used to.

Snapshots from Sao Paolo Rivera

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Monday, November 03, 2008

Watching the magnificently dramatic F1 Grand Prix yesterday reminded me that I haven't yet received the DVD of photographs taken on my recent helicopter trip over Sao Paolo. It was a fascinating half day journey, which completely shattered my preconceptions of what the city would be like. Alas, I will write more about that when the DVD arrives, so for the time being, let me focus on another - even less well known - part of Sao Paolo that the Paolistas know simply as Riviera...

On a good day, Riviera San Lorenzo would be about an hour's drive from downtown Sao Paolo, but in traffic terms, there's rarely a good day in this city. The traffic in Sao Paolo is almost as bad as Moscow, little wonder that the residents grow up into famous racing drivers like Ayrton Senna and now Felipe Massa. Is the traffic bad in Stevenage? Why are there no Russian motor racing drivers? I digress...

The Riviera occupies the full length of a huge sweeping bay, fronted by a wide beach of powdery sand and with a forested headland at either end. Neither superlatives nor photographs really do it justice. We can but try though, so I've picked out some of my better snaps and included them below to give you an idea. And here are a few superlatives to throw around: unsurpassable beauty, a completely idyllic morning view and what the hell am I still living in London for? - ok so maybe I am getting carried away, but I thought it was a bit special.

It was also a completely different side to Brazil to any that I had seen before. The sand was practically without a visible blemish - pure, fine and wonderfully clean - although that's not uncommon in Brazil, as you might have heard. But the Riviera is wonderfully well-maintained, with fashionable and upmarket developments that are built to the highest standards of design and taste, all well-planned, giving residents a feeling of space and calm. The area is completely free of crime, devoid of advertising hoardings and understandably popular as a weekend destination for Sao Paolo's upmarket wealthy residents.

Sadly, it's almost fully constructed, and my hosts didn't really have too much appetite for marketing the units internationally. Local demand is strong - units sell quickly and the few developers that still have buildings under construction are seeing prices rise rapidly.

Once the last few vacant lots are built on, the whole town will be fully developed with no more space to build. So the local market is quickly absorbing any available units, without too much effort from the developers. So close to Sao Paolo, it's a place that is unlikely to go out of fashion any time soon, but sadly it's one that the Brazilians look set to keep to themselves!

Getting By In A Tough Market..

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Friday, October 24, 2008

As one of my contemporaries put it recently, this is "squeaky bum" time for the overseas property industry. Anyone that tells you things are great right now in their business is almost certainly a liar. The market is as tough right now as when we launched in the year 2000, right after the dotcom bubble burst the first time around. Back then, all I had was the germ of an idea, a fierce determination to prove that I could run a good business and a bit of stored up goodwill from some friends that were prepared to help me out on the cheap.

This time round, we're much better equipped to cope with the market conditions. The fundamental business model is sound, the product is great and we are still able to deliver something that is massively in short supply: leads. Maybe not so many as in the heyday of 2006 and 2007, when all you had to do was send out an email and the enquiries would start piling up by the dozen within the hour. But the right projects are still generating a lot of interest among what have become a much more selective group of investors.

We've seen project launches this October that have generated more than 150 leads. But to hit those kind of highs in this market, you have to have all the right elements in place - a well-packaged product that's different, exciting and believable. You also need to make sure that the message is properly conveyed in the listing, with the best possible use of images and a well-honed description that catches first the attention and then the imagination of the people it reaches.

And when the leads do come through, customer service skills need to kick in. Leave a lead sitting in your inbox for a few days and you'll get nowhere. Choose not to call them and another agent will - with so much choice in the market, clients have every opportunity to go elsewhere, and you need to be on the top of your game to make sure they choose to give you their business.

Those with good systems and business practices can come through this current storm and be well-placed to flourish when the market recovers. This is the time to go back to basics, play to your strengths and really work hard to eliminate your weaknesses. Downsizing, changes in strategy, mergers and outsourcing can all play a part in making sure your business copes, but there's no substitute for making sure you're actually good at what you're supposed to be doing.

Dan Johnson

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