How data is changing residential property investment - PropHero

PropHero

Byline:
By Mickael Roger

Date:  7 February 2022

 

When you are investing in property, it’s vitally important to make a smart decision, and in this day and age, that means making an informed decision with the benefit of data. 

PropHero’s proprietary models pull over 40 million data points and monitor 240+ critical features in 18,000 suburbs in Australia. These data points cover everything you need to know about a property’s investment prospects. 

In January 2022, I was honoured to be invited by Australia’s peak body for proptech, the Proptech Association Australia (PTAA), to be an expert guest on The Proptech Panel to talk about how data is changing residential property investment.  

Here’s the download from the discussion.

PTAA: Mickael, tell us about PropHero, what is your elevator pitch?

MR: In short, we are a data-driven property investment platform that helps you find, buy and manage the best investment property. We are disrupting the buyer’s agent industry for property investment in an end-to-end, data-driven and digital way.

At PropHero we believe that education about property investment is critical. We are focusing on giving clients the ability to understand what makes a great investment and to recognise the signals in the market to find the best property.

PTAA: Where did the name ‘PropHero’ come from?

MR: It’s actually a funny story, for weeks we couldn’t decide on a name and we thought let’s launch a poll on LinkedIn, thinking that we would get 10 to 15 votes, but overnight we had hundreds of votes and comments from supporters calling us their ‘Prop Heroes’.

PTAA: Did you co-found PropHero to solve your own problem?

MR: Yes, that is exactly right. When I first started to invest I was passionate about property, I had savings, but I lacked time and knowledge so I needed help from a professional. However, after working with an agent I realised my money was being spent on professionals relying on gut feelings.

I used to work at McKinsey where I was trained in the amazing capabilities of AI and data.

When you think about it, it’s crazy that such an important financial moment can be based on a gut feeling and influenced by someone who may have a conflict of interest.  So that is why I started this company with my co-founder Pablo Gil Brusola to make investing much more efficient.

PTAA: How are you using technology and what have you built on your digital platform?

MR: We use data and AI to constantly monitor and scan 18,000 Australian suburbs to find real estate trends and the best properties. For buyers, the Australian property market is good in the long term, but short term it is not necessarily a guarantee that prices will go up – one in five suburbs has seen their median price go down in the short term and 55% of suburbs will currently give you negative cash flow.

We are using data and AI to track the market and identify patterns, and together with our trusted network of human experts, we can get the best property investment results.

PTAA: If people are investing without the benefit of data and a digital platform what challenges do they encounter?

MR: Anyone who has ever invested in property will know it is time consuming and stressful.  There are only two choices: either do it yourself or go through a buyer’s agent.

If you do it yourself, the easiest option is to buy next to where you live, however, statistically this is not a good return on investment.

A buyer’s agent will help you buy in a better area, but they require you to pay $15,000-$30,000 in fees.

Our mission at PropHero is to make property investment simple and more profitable by finding the suburbs with the best properties and simplifying the process for everyone.

PTAA: Mickael, is this a global problem?

MR: Absolutely! We actually just opened our first international office in Europe and we may potentially open another in South America.

Property investors all around the globe are struggling; a study from MIT in the US that compared the digital and data maturity across industries found that real estate ranks 21 out of 23. So the industry is very immature, and we want to continue to grow in terms of using data, for the benefit of consumers.

PTAA: Can you tell us about your customer base?

MR: Interestingly, we have very diverse customers at PropHero.

The first group, are millennials who have savings and want a simple digital experience, but they lack time and don’t trust old school players.

The second group are older customers, who already a property portfolio and are attracted to PropHero’s data-driven approach.

PTAA: What does the typical customer journey look like at PropHero?

MR: When we onboard a new client, they are paired with a property coach to guide them through the process. First, we start with a human strategy session to explain how our data models work and to discuss your strategy. Next, you will be given access to our platform where you will see all the properties and their insights. Once you have found a property, it is simply a matter of purchasing the property through our simplified, digital buying process.

PTAA: You’re about to close a seed round of capital, can tell us what that capital is going to fund?

MR: Our first priority is to continue improving our data models to keep finding the best deals; we currently outperform the market by 2.1 times so we aim to increase this number as well. Priority number two is to continue improving the digital journey, while we have made great progress we still have a lot of work to do. Our main target is to reduce the time people spend on investing in property by about 99%.

At PropHero we want to transform and take the pain out of the investment process to become a fully integrated, digital, one-stop shop- making
property investment an enjoyable experience.

The remarks in this blog have been condensed for length and edited for clarity. If you’d like to learn more about investing in property with PropHero, book a free strategy session call with us.  

  

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