Justin Wang is managing director of Sydney-based Property Investors Alliance, a company providing a full suite of services to property investors. TheUrbanDeveloper.com caught up with Justin to find out more about his company and insights into property investment.
The Property Investors Alliance is one of Australia’s largest and fastest growing property investment organisations, currently providing services to more than 7,000 investors. What do you feel is the most important role that your company plays in the real estate market?
It’s immensely satisfying making property investment accessible for everyday Australians and contributing towards their own retirement goals. In addition to assisting our clients on a personal level with their financial freedom and security we are also helping the economy through the provision of greatly needed rental stock for our growing population.
How do you make investing in property easier for clients?
Like everyone else, investors are time poor and investing in property can be extremely time consuming. Traditionally, investors have to deal with multiple stakeholders to manage the purchase of a new property.
Our unique value proposition offers clients a vertically integrated property investment solution; clients can purchase a property, arrange finance, manage the settlement of their property, resolve defects and even engage us to manage the property once it’s rented. We streamline the entire process and make it far easier for investors. PIA is essentially a one-stop-shop for property investment. With our new investor portal, our custom software, the investment journey will be even smoother.
Plus, we offer a rental guarantee on many of our properties. Many of our customers are long term investors with growing portfolios. PIA’s Rental Guarantee offers the security of tenancy, and in those periods in between, consistent rental return. This contributes to peace of mind.
What do investors look for when considering in investing in a particular property?
There are consistent attributes our clients look for. Location is paramount. They want hot suburbs and key growth areas with access to amenity and transport like shopping centres, train stations, bus routes, education and parks etc.
The metrics need to add up. They need a good yield with solid capital gains potential and low vacancy rates to attract available renters. They look for a quality product and consider the size, layout, quality of build, courtyard/balcony size and fixtures and fittings. They want quality fixtures, durable fittings, flooring and surfaces that are modern and stylish, but not restricted to a trend. And they love quality brands.
They want low strata fees and are now looking for smart and energy efficient technology within the building including solar, energy efficient appliances, use of recycled water and gas and energy efficient building techniques.
Any possible change to negative gearing is obviously something we and our clients would be very concerned concerned about. Our research shows most of our clients use or intend to use negative gearing as a tool to enter the market. Negative gearing has long been a well utilised strategy for property investment. In fact, in Australia, investors make up of 30% of the home market and 46% of new mortgage commitments.
Rather than changing negative gearing law the Government should be addressing the undersupply of housing that continues to affect the Sydney market. We will face a chronic underinvestment in housing product in Sydney. Penalising property investors by changing or abolishing negative gearing will only act as a disincentive to property investment, thereby exacerbating the pre-existing undersupply of housing stock. This will have a downward effect on demand for established homes (as soon as you put a key in the door it is ‘established’), and ultimately it will affect privately delivered supply and will lead to increase rental rates – the burden ultimately being carried by renters (due to diminished supply). For PIA customers, any changes would affect their ability to plan for their future and rely on passive income stream to supplement superannuation/pension.
Why is investing in Australian property so attractive?
Australia offers a relatively stable government, financial structure (one of the most highly regulated in the world) and lifestyle. Plus, there has been a strong track record of growth in the real estate market in Sydney over the past 30 years.
Renters generally respect investor’s properties here and there are adequate legal ramifications in place on the rare occasions they don’t.
Sydney, in particular is considered one of the most liveable cities in the world and offers a great lifestyle with pristine beaches, a beautiful harbour and enviable weather, so it’s a great place to invest. Regardless of an investor’s financial capacity, there are plenty of opportunities at all price points, despite fluctuations. And there’s plenty of room for investment growth.
I see strong projected population growth and a robust long term forecast for the Sydney market. Currently the market is quite fragmented with many conflicting objectives – if I cast my mind to the future, it will be an integrated approach to the market.
Over the next 20 years, I refer to this period of our growth as the ‘Mega PIA’ where technology provides options, mobility, faster deliverables and access – plus new services we can use to expand our PIA offering. We will be able to provide a more individualised approach to services – where customers are in control of their own journey and we provide the necessary platform. We are an individualistic society, one who wants to receive and communicate information that suits our own individual needs – wherever we are, whenever we want, however we want to invest in property.
My business started as a real estate agency and service oriented business, over the next 10 years, we will build a new model – a new approach to property development.
We have an in-house team of 12 software developers who will be busy continuing to deliver our integrated service model in response to our client’s changing needs.
What got you into property investing initially?
I struggled to get ahead in Sydney in the 1990s as a new migrant from China. To make ends meet I worked as a waiter, Chinese language teacher and a door-to-door salesperson for a large telecommunications company. After ten years of hard work, I realised I needed to secure a better future for my family. So I started in real estate sales and soon found that whilst an appetite to invest in property existed, there was still a lack of confidence in the market and a general lack of trust in real estate agents by consumers. I decided to start assisting mum and dad investors in navigating the property market by creating a property investment platform that was not only highly transparent, education and consumer orientated but also focused on securing a better future.
What do you wish you knew about investments when you were 20?
That investing in your personal experience, by working in various jobs and learning how to successfully interact with people is a sound investment strategy in your future. Finding a solution to a big problem is the challenge. And having faith and patience certainly helps!
Throughout your career, what has been the key learning that has made the most profound impact on you? Who taught you this?
I learnt that finding solutions to big issues is a pathway to success. Anybody can find a better process, offer a me-too product or improve a service offering, but predicting the challenges of the future – that requires blue sky thinking and new ideas. Don’t be hampered by current thinking or problems – think beyond them. And if you are experiencing an issue, chances are many others are too. Unfortunately, I had to learn this myself!