This is a guest post written by Ruben Martinez

Google and the property industry

It comes as no surprise to hear that Internet giants Google are expanding into the property industry with their new property listing service on Google Maps.  After all they own a vast amount valuable industry data about what visitors are searching for. Google are supposed to know what we are looking for, how, from where and when.

How can we learn more from the data Google do share with us? What interesting data can we extract from the various Google tools about the property industry in just 5 minutes?

1. A larger proportion of people are looking to rent a house rather than buy one compared to previous years

This Google Trends screenshot shows the relative search volumes for the terms ‘houses to rent’ (blue) and ‘houses for sale’ (red). The graph shows that there is a distinct closing of the gap between the search terms, and whilst ‘houses for sale’ is the more popular search term, the interest in online search of property to rent in consistently growing over the last five years.

2. There are 24,900,000 searches a month for people looking to ‘rent houses’

You can see from the keyword search volume tool results above, that the number of searches for property renting related terms is incredibly high. Interestingly, more people search for the plural term ‘houses’ rather than house, yet more people search for the non-plural ‘property’ than ‘properties’.

3. Property is a term found in almost 77 Million results pages of co.uk sites indexed in Google

Interestingly, the leading property portals or estate agents do not rank highest for the query on Google but large national newspapers: Guardian, Telegraph and Independent.

4. Google wants in on the property industry

It’s hardly surprising that with all this insightful data to hand Google are beginning to try and monetise their knowledge of the property industry with Google Maps Property, which was recently launched in the UK. It is possible that in the near future Google might begin to show ‘universal’ listings in the Google search results for Google listed properties rather than results to RIghtmove, Nestoria, Gartoo and other vertical property search engine results.

5. Milton Keynes is the number 1 city in the world for people searching for ‘house for sale’

Milton Keynes is the area in the whole world where searches of ‘houses for sale’ show the highest frequency in relative terms to all other searches about any topic from that location. Interestingly has seen a rapid decline in asking prices for housing since 2008 as displayed below (source: Gartoo.co.uk).

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Ruben Martinez is marketing director of Lokku Ltd, a company specializing in online property search and a writer for Lokku Labs. Lokku Labs is the experimental platform to test ideas of vertical search, like where-can-i-live.com and Gartoo.co.uk.

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I am not a tax adviser, so I was really pleased to be emailed just now by the Tax Cafe to say that they had produced one of their excellent tax guides to deal with just this situation. It is by Carl Bayley who is a well known and respected author on tax matters – you may already have one of his other books.

I have not had time to read this in detail, but the chapter headings are as follows:

• The ‘Current’ Capital Gains Tax Regime
• Special cases
• What happens next
• Should You Take Action Now?
• Creating a Capital Gain
• Open market sales
• Transfers to Another Individual
• Transfers to a trust
• Transfers to a company
• What if it goes wrong
• Other planning issues
• Problem areas

There are also several helpful appendices such as on tax rates and allowances.

I expect that many people will find this book very helpful. The blurb suggests that it will be essential reading for all Property investors, Second home owners, Business owners and Share investors. It costs £24.95.

You can read more and buy the book online >> here (affiliate link).

Buyers will also receive a complimentary electronic copy of the Tax Cafe comprehensive tax guide ‘How to Slash Your Tax 2009/2010′ – worth £19.95.

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1. Please introduce yourself. Say a bit about yourself and your company

I’m David Lawrenson, owner of property consultancy, landlord advice and buy to let information website, www.LettingFocus.com

I’m author of the UK’s top selling property book, “Successful Property Letting – How to Make Money in Buy to Let” as well as being a landlord, media commentator, consultant and the landlord blogs at www.LettingFocus.com/blog.html and www.LettingFocus.com/blogs

Primarily my main role is acting as a consultant to a range of businesses that have products and services for landlords.  I help them improve their buy to let and landlord facing products and services.

My main clients include banks (buy to let mortgages and insurance), local authorities and housing associations (setting up private rented sector access schemes) and property portals such as Rightmove, though I do work in other sectors too.

As well as my corporate work, I also find a little time to help private investors as a property coach and mentor.

I don’t charge corporate rates to private landlords but I show property investors of whatever level of experience how they can make money in residential property investment and buy to let using ethical methods that actually work and without taking undue risks.

2. How did you first become involved in property?

I have been a landlord for 24 years. I started when I bought a 2 bed flat and let the other room out. It paid off all my mortgage and I figured this was a good way to make a living and more fun than my day job.

3. What do you think is your greatest achievement so far?

It has to be my book. It has sold 25,000 copies in the 4 and a half years to date and has been the UK’s highest selling property book for 3 years running now.

I think people like it because it is up to date (we have had to revise it many times to keep up to date with all the changing legislation the government keeps chucking at us) and it is honest and doesn’t make any ludicrous claims that you can be a millionaire in a few months like lots of other books do.

I also enjoy all the consulting work I have done to date – whether it is doing 5 figure contracts for big firms or the government or just small half day consulting jobs for private individuals. I enjoy it all and no, I don’t miss being a wage slave and working for someone else one bit.

I also like being a good landlord and looking after my tenants. Most stay a long time so I guess I’m doing something right.

4. Do you or your company have any exciting plans for the future?

Not really. I will just keep on keeping on doing this because it is what I like.

Since I have moved my consulting to do more business to business work, I have become very busy especially with work from banks who want to improve their buy to let lending products and local authorities who want to do more on private rented sector access schemes.

The public sector is surprisingly open to new ideas. Some of the banks are still too arrogant to figure that they have to give a landlord more advice than “here is a £200K mortgage, now off you go.” But I’m working with some of the more forward thinking banks right now to give their buy to let borrowers a lot more help and advice and to improve the knowledge of their customer servicing and sales staff as well as what is on their websites for their customers. This should “change the game” as far as buy to let mortgages are concerned and it will definitely cut my clients’ arrears rates.

Plus, I’m always looking for new property investments for me.

5. What do you think are the greatest problems facing the private rented sector today?

Some regulation can be misconceived and badly targeted.

Take landlord licensing in Scotland. It has all cost a great deal of money and yet loads of landlords letting property remain outside the scheme (despite the risk of fines).

It was supposed to drive out rogue landlords, and yet, the number of rogue landlords driven out by the scheme is pitiful.

When you look at it, it is just a tax on good landlords and I guess it gives some civil servants a job administering the scheme.

6. What do you think are the greatest opportunities?

Too many landlords today don’t understand how letting to people on benefits works.

This is a growing area that can be very rewarding providing landlords know what they are doing.

7. We have a new government. What would you like them to do for the private rented sector?

I’m going to upset some corporate clients here, but here goes.

The government could start by re-reading Julie Rugg’s report that they commissioned, where she said that the small private landlord is doing very well (the private rented sector has grown from 8% of all housing stock in 1988 to 15% odd now).

Then they could ask themselves why they want to dole out tax breaks to big property firms and city institutions so they can make investing in the private residential sector or “build to let” work for them financially.

I ask the government why the big firms should get special tax breaks.

I would say that if they can’t make buy to let work without special treatment then maybe they should not be in the game at all.

Instead, I would suggest the government should look at the oligopoly that exists in buy to let mortgage finance and sort that out and get buy to let mortgage rates and fees down.

If they do so, the small landlord can start buying more property very well.

Also, why regulate buy to let mortgage finance when it patently obvious that it is the activities of some property clubs and bad advisers that needs regulating.

8. Do you use social media (blogs, twitter, LinkedIn etc)? What place do you think it has in the future of the property industry?

I have spent ages learning about and implementing search engine optimisation but of the social networking stuff I only use Twitter (and only because it is quick to do). My Twitter site is www.Twitter.com/LettingFocus.

Apart from that, I’m not convinced of the benefit of the rest of the social networking scene to my consulting business – whether we are talking private landlord clients or big organisations.

Despite the claims of some social networking advocates I know, that most organisations don’t consult Linked in or the like when they want to hire an expert on landlord products or indeed any other sort of expert for that matter.

9. What is the most important lesson you have learned during your time in property?

Buy the right property in the right place and in the right location (especially where transport improvements and regeneration are actually happening)

Make sure you check out tenants carefully or make absolutely sure your agent has done this for you.

There are great letting agents out there and there are ones who, frankly should not be in business at all.

In case you have the latter, you have to keep them on a short rein and fully check the references of any tenants they get for you. (I hear from so many landlords who got a tenant from hell through a duff letting agent!)

Then treat tenants well and have a very robust system when they come to leave to reduce the chance of disputes.

10. What advice would you have to someone thinking of entering the property industry today?

Read my book.

And don’t listen to the many scam merchants in the piranha invested property advice pool – remember property investment advice is still largely unregulated.

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Thanks for your wise words David. And I can vouch for the book being a good one, well worth getting, whether you are a new or an experienced landlord. Click here if you want to buy it..

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1. Please introduce yourself. Say a bit about yourself and your company

My name is John B. Corey Jr., and my company name is Chelsea Private Equity.

With the formal bits out of the way, let me tell you a bit about my past and how that shapes my future.

I started investing in real estate in California in 1983. I was a new software engineer working at Hewlett Packard. Like many of my co-workers, the idea of investing in property was attractive as it was all about the numbers. In software you are building solutions to fit a business requirement and otherwise inventing the future. More so when the software you are creating is a product the company sells.

With real estate you look for ways to put a deal together. You study the numbers as they are and you make projections for how they could be. You see the glass as being half full while many times the seller notices the half full glass.

Jumping forward, in 1994 Swiss Bank Corporation (SBC) moved me to London. SBC was a Swiss retail bank plus a global investment bank. After a reverse take-over SBC became today’s UBS. I worked for the bank for five years and then spent time at few more investment banks. I also ran the software development function at Egg as an interim manager and did some work at Royal Liver in Liverpool.

My UK investing activities kicked off in 1994 but nothing all that serious happened until 1999 as I was too busy with my day job to really dive in to the UK property market.

These days I spend time advising clients on their property portfolios, I work on joint venture deals and I am overseeing the development of an iPhone application. The ‘app’ will let investors be more effective when evaluating a BTL deal.

2. How did you first become involved in property?

The detailed version of the story is I read a book called “Nothing Down” by Robert Allen. A few weeks or months later there was a free evening seminar advertised on TV. If you went to the meeting you would receive a free cassette tape. Yes, it was a while ago; back when home study meant books and tapes. At the end of the meeting there was an up-sell. If you signed up then and there you could attend a two day course for $495. As I was very willing to sign up I found myself driving to a hotel in San Francisco on the following Saturday and Sunday so I could attend the training.

Not knowing anything about ‘analysis paralysis‘ I took Monday morning off from my day job and walked down to the nearest real estate office (estate agency in the UK). By that afternoon I had a ‘exchanged’ on a ‘nothing down’ deal for a detached three bedroom house. As I had been renting a bedroom in a large house with some fellow engineers I figured I could buy the place and rent out two bedrooms. I was soon the owner of a home where my month cash outlay was less than what I had been paying to rent a room in prior house.

3. What do you think is your greatest achievement so far?

Doing my first two deals. It was only later that I realized how much of a difference it made to get out there and take action. Put another way I did not consider it an option to sit on the fence. Being unable to pull the trigger was just not part of my make up. I calculated the downside and figured I could manage the details. Living in a house with others had been a way of life thru university and my first two years of employment. How hard could it be to send in the mortgage check and sort the maintenance?

4. Do you or your company have any exciting plans for the future?

Yes, but I would have to kill you if I told you.

My background is in technology. Many companies in Silicon Valley operate in ‘stealth mode‘ while they get a few things in place. You want to have an impact when you reveal your plans and when you launch the product. It should be noted that I spent a year working for Steve Jobs so I understand a bit about the Apple magic in terms of product launches.

That said, I can offer a peak behind the curtain if you promise not to tell anyone.

I find that the typical UK BTL investor learned their trade during one of the best markets ever for investing. Prices were rising and lenders were pouring money into the hands of the borrowers. Then we had the credit crunch. A number of investors were unprepared for what it really takes to run a self-sustaining real estate business. The days of refinancing to pull out equity every year or two are over for a while.

Given the above I find that BTL investors are pretty bad when it comes to the numbers. Or they are great at adding up some of the numbers while totally missing some others. What happens is a false sense of what break even is and what it takes to weather the market ups and downs. I know one investor / adviser who fails to remember difference between cash flow and profit. Many businesses in lots of sectors have gone bust by confusing the two.

I aim to raise the bar; to set a more professional standard. I have spoken to some lenders to identify Key Performance Indicators (KPIs) that should be monitored and reported. As the saying goes, this is not rocket science. Watching the right KPIs is similar to driving with your eyes open. You must be able to see the road in front of you while still monitoring the gauges and dials that provide the feedback as to how everything is operating.

The commercial real estate sector in the UK and the US operates this way. The US residential investment sector is also pretty good in terms of KPIs. Maybe the UK BTL sector can step up.

5. What do you think are the greatest problems facing the private rented sector today?

Two things:

It is a rather new sector having largely been born in 1996. Many of the smaller investors are still learning their trade. Quite a few run a good operation. That said, there is still a sizable portion who are focused on landing deals for the least deposit possible and not optimized for the ongoing cash flow. Grabbing the tiger by the tale and then not knowing what to do with the now angry tiger is one way to put it.

Second, and much more important is the political climate. As investors or SME businesses, the sector is rather fragmented. The public perception is any investor is somehow part of the landed gentry and that we are oppressing the tenants. The government statistics tend to say otherwise but the perception is a landlord needs to be placed more and more under state control. Landlord registry, councils being able to view sharers as living in an HMO and other recent ideas or changes are examples.

I am a believer in the right level of regulation. Not too much and not too little. There does need to be standards. For example I am rather supportive of tenant deposits being protected as the deposit is the tenants money up until there is a valid claim from the landlord. With that said, there is a tendency for elected officials and some groups to advocate for more regulation rather than implementing and using what is already on the books.

It is funny how the government sponsored reports and surveys almost all say that something like 93%+ of all tenancies end as agreed with no dispute. Something seems to be working so why the rush to introduce more regulations?

6. What do you think are the greatest opportunities?

To be more professional and to build scale during the credit crunch. The best deals come from motivated sellers. Credit crunches produce a lot of motivated sellers. A credit crunch also eliminate the dumb buyers who pay over the odds to secure a deal. The froth is blown off the market, lenders return to more sensible lending and people no longer believe property always goes up. There is time to evaluate a deal rather than rushing before someone else snaps it up.

7. We have a general election coming up – what would you like to see in the winning parties manifesto as regards the private rented sector?

On this topic I defer to the NLA. Working with government or opposing government takes a lot of time and money. The best way to gain leverage is to represent a group of voters. An individual voter is not going to be listened to as one vote makes no difference.

By being a member of the NLA a UK landlord / property investor has a team to lobby the government and to monitor the situation before changes are imposed.

8. Do you use social media (blogs, twitter, LinkedIn etc)? What place do you think it has in the future of the property industry?

Understand I come from a technology background. I have a degree in computer science and I studied Artificial Intelligence at Stanford while working in Silicon Valley.

I use most of the things people know about and a number of other tools/services that the public is yet to discover.

I started as a real estate investors when cell phones were bolted inside a car, when answering machines were device with a tape, many offices did not have a fax and the web had not been invented. Emailing pictures was not done and desktop video did not exist.

The tools that are available today speed up connections. You can get recommendations, you can refer people, you can research a topic and contact the expert. The fundamentals are still the same in terms of knowing your business, building trust with your customers, vendors and partners and delivering projects on time.

Most of today’s social media is nothing more than a different way to share or talk with others. That said, social media makes it a whole lot easier to find people of like minds. Much less need to use the local person if there is someone down the road who has superior expertise and skills.

9. What is the most important lesson you have learned during your time in property?

I will give you two.

First, you can be lazy. It is a long game rather than a way to get rich quickly. For the average person you only need to find a great deal every year or two and then hang on to the deal. This is not a sprint. How quickly you find a deal is not critical to your success. It might be emotionally more rewarding to see rapid progress but it is not required. Ten deals you still own spread over twenty years is better than almost any public or private pension.

Second, time will be on your side if you let time get to work. The sooner you buy the first property the sooner time can work its magic. Most of the gain in the residential sector comes from appreciation that is fundamentally tied to underlying or long term inflation. Housing is a good inflation hedge. If you own a property for 20 or so years you will likely find it is worth more. If, at the same time, the debt has been paid off by the tenant you win a second time. Inflation drives up the value of the asset and someone else goes to work to pay off the debt. The tenant gets a good deal as they get a place they can call home without the full cost and hassle of ownership. Win win.

Time is on your side if you make a decision and buy that first property.

10. What advice would you have to someone thinking of entering the property industry today?

Start simple. Buy a house to live in or buy a house that you rent. Just keep the deal simple. If they have never purchased a house before there is a lot to learn without trying to make it more complex. With the second purchase you can raise the bar slightly and learn a few more things.

Focus on keeping what you buy unless you have proven you cannot handle being a landlord. In that case I would suggest you become a partner with someone else. The greatest benefits occur over the long term so try and avoid the short term, buy to sell (BTS) model. With the exception of developers BTS just does not work well as there are high friction costs associated with the constant buying and selling (stamp duty, time spent, fees & commissions).

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Many thanks indeed John for your thoughtful and insightful answers,  which I found fascinating, as I am sure many others will too.  I wish you all the best for your undisclosed plans  (which I daren’t ask about now …)

1. Please introduce yourself. Say a bit about yourself and your company

I edit Landlord & Buy to Let magazine and organise trade shows for the private rented sector with my team at Accession Exhibitions & Publishing Ltd based in Macclesfield.

2. How did you first become involved in property?

I launched our first PRS event in 2006, which is also the same time I purchased my first investment property, a small commercial unit in Stoke on Trent purchased through my SIPP pension and then rented to my business until we relocated in 2007.

3. What do you think is your greatest achievement so far?

Becoming a father, our first child Arthur was born in September last year. Everything else pales in comparison. However, from a business perspective it would have to be the culmination of all our activities in the private rented sector over the last four years. Building our trade shows and magazine from scratch has been exciting and rewarding, its not just about the business, we helping build a community of landlords.

4. Do you or your company have any exciting plans for the future?

I am not sure I should be announcing this yet, but since you ask, we are moving our spring show from Olympia to Excel in 2011. We will have more space to play with and plan to expand our offering accordingly. Also, we are moving Landlord & Buy to Let magazine’s frequency from bi-monthly to monthly in September, our sector is moving so fast it needs a monthly independent trade title more than ever.

5. What do you think are the greatest problems facing the private rented sector today?

Government ignorance and interference.

6. What do you think are the greatest opportunities?

There are thousands of experienced landlords out there who have been unable to expand their portfolios due to the credit crunch. As the flow of lending increases, these landlords will fuel the recovery of the housing sector and provide professionally managed, flexible housing to meet demand. A new breed of more experienced portfolio landlords will emerge.

7. We have a general election coming up – what would you like to see in the winning parties manifesto as regards the private rented sector?

A promise to listen to landlords and recognise the important role they play in the economy and society. They say there are up to a million landlords in the UK, however, we still lack political power. Its up to us to unite and demand a fair deal for landlords and our customers – the tenants.

8. Do you use social media (blogs, twitter, LinkedIn etc)? What place do you think it has in the future of the property industry?

A very timely question, I am taking a long hard look at social media and how it can support our business and industry. Use of these services to create groups of like-minded people will explode in 2010, we should all be using at least one of them. I prefer Linkedin for business and facebook for pleasure, but don’t yet understand the point of twitter… give me time on that one.

9. What is the most important lesson you have learned during your time in property?

Having purchased my second commercial premises at the peak in 2007, it to be that timing is everything, however, as I have a long term tenant and don’t plan to sell this one for a long time, it should work out in the long run.

10. What advice would you have to someone thinking of entering the property industry today?

Buying your first investment property is likely to be an emotional decision, it is exciting and its OK to enjoy the experience. But don’t be rushed in and don’t get carried away other opportunites are always around the corner. Never stop researching, there is always something more to learn.

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Many thanks for your wise words Oliver. Don’t forget everyone that you can contact his company at their web-site www.landlordshow.com. You can also sign up there for the magazine, which is worth doing as it is very good and free!