Doron Peleg Women Make Better Property Investors Than Men Interview

Doron Peleg Women Make Better Property Investors Than Men Interview

Men are risk-takers; women are cautious. Men are tempted by -get rich quick' schemes and marketing ploys, while women look for long-term performance. New research by RiskWise Property Review reveals surprising insights into the mindsets and motivations of female and male investors.

Typically, RiskWise's research revolves around supplying investors with macro-economic trends and key growth data. However, when recent studies revealed women are -better' Wall Street investors than men, we decided to ask the question: does the same hold true in real estate too?

Are women really better property investors than men? And if so, why?

Before beginning the study, we defined the characteristics of a successful property investor as one who has a long-term investment strategy, takes low risks and generates high capital growth through a defined strategy and independent research.

The results were unexpected, and revealed astonishing realities about the way men and women are influenced in their property purchase. Here is what we discovered:

Women are more aware of risks and seek tools to manage it; men tend to ignore it.

Our clients use RiskWise for independent, top quality research services to locate areas with minimal risk and an expectation of solid return. Essentially, they want deeper insights so they can make smarter decisions. As a company, we have never specifically targeted gender in any of our marketing.

However, we discovered that 58% of our website traffic was generated by women – in particular, professional women between the ages of 25 to 44. This is particularly interesting because it fits the rising trend of young women taking more control of their financial future through real estate.

Women's interest in risk and mitigation strategies was 38% higher than men, who demonstrate a lower level of risk awareness. In fact, studies have shown men have a higher tendency to gamble and that they are overconfident and immodest. This is a concern in the property market, where high-risk ventures can have devastating consequences.

Women search for low risk and long term sustainable capital growth; men are more likely to invest in a 'hot spot' and 'get rich scheme'

To understand the differences in decision-making processes, we researched -hot spot' investments – investments that RiskWise's historical research has shown are a poor investment strategy.

We collected data from the property professionals who facilitated hundreds of investment transactions in Queensland's booming mining towns in 2011 and 2012. Many of these properties have since busted with the industry downturn.

The data confirmed that the vast majority of the decision-makers in these -hot spot' investments were men.

One professional commented that 'in 2012 men were significantly more likely to think that an investment in a mining town in central Queensland is a better investment than units in the middle ring of Sydney".

Men are more easily manipulated.

Free educational seminars are designed by real estate spruikers to sell off-the-plan – and often low performing – new properties. Many of them are high on the RiskWise 'off-the-plan Danger Zones' list.

Women are more likely to recognise the truth of the situation – that they are not the client at a free seminar, and in fact the seminar organiser likely works for a property developer and has a contractual obligation to sell the properties for the highest possible price.

Men, on the other hand, are more likely to be swept up in the hype and believe that they are the client, and that the organiser of the free seminar will truly act in their best interests.

Property marketers also use enticing advertising to appeal to men's visual senses. For example, it's common practice for female models to be hired to stand beside professional sales people at property expo's.We undertook a study of the real estate agents who hired models in the last several years.

Typically, the models increased the traffic to their booth by 50%-100%, with a similar increase in the rate of high quality sales leads, many of which converted into transactions.

It was noted by these real estate agents that even a short absence of the model resulted in an immediate and significant decrease in traffic to their booth.

One of the presenters we spoke to commented, 'you can sell anything to men – you just need a beautiful model who lures them in, has some small talk with them, and our polished sales people take it from there all the way till they close the deal".

Women check the facts, men can be easily swayed by opinion.

Being generally more risk-averse, women validate any property information they receive with an external and independent source.

Men are more inclined to search for validation of a pre-conceived idea. Even when presented with formal research, complete with data and analysis which clearly reveals the risks, men have a tendency to brush aside facts.At RiskWise, we have personally witnessed some prime examples of this mindset at work. A male investor was told by a real estate agent that an investment in a unit in Southbank Melbourne – a location deemed too high risk for several major lenders due to potential oversupply – was sound because 'everyone wants to live on the water walking distance from the CBD".

We provided the investor with our research, which confirmed the potential risks. Without hesitation, he repeated the information given to him by the real estate agent, despite the facts in hand.

The second example involves a couple who migrated to Australia and had never had any dealings with property. The female partner was more knowledgeable overall, but asked for more definitive research. The man, on the other hand, had a very clear idea regarding where to invest – based largely on media chatter - and he was very confident that he did not need any research.

The final analysis: why women make better property investors than men.

We said in the beginning that a successful investor is one who follows a strategic process and backs up action with independent research. Women have a natural tendency to operate in this fashion, which protects them from high risk and increases their chances of investing with long-term success.

The risk of failure increases when the decision-making process is driven by flashy advertising or big numbers. Men, by nature, are more likely to follow a gut feeling rather than facts and research. As a result, men are in greater danger of being lured in by industry hype and -sure bets' than women are.

Interview with Doron Peleg, CEO RiskWise Property Review

Question: What did the recent RiskWise Property Review reveal?

Doron Peleg: In summary - that women make better property investors than men. Men are risk-takers; women are cautious. Men are tempted by -get rich quick' schemes and marketing ploys, while women look for long-term performance. New research by RiskWise Property Review reveals surprising insights into the mindsets and motivations of female and male investors.


Question: What inspired this particular research?

Doron Peleg: A good question. Typically, RiskWise's research revolves around supplying investors with macro economic trends and key growth data.

However, when recent studies revealed women are -better' Wall Street investors than men, we decided to ask the question: does the same hold true in real estate too?


Question: Where you surprised that women often make better property investors than men?

Doron Peleg: I, personality, was not surprised at all, and also many well regarded property professionals who are our clients. However, within the team, few of the people were very surprised and wanted to have a challenge session to ensure that the results are accurate. Men are often very confident, very expressive and have a natural skill to present that they know what they are talking about. So the perception that men are better investors was also held by few people on our team


Question: Why do you believe women often make better property investors than men?

Doron Peleg: First, we need to understand the characteristics of a successful property investor. This is one who has a long-term investment strategy, takes low risks and generates high capital growth through a defined strategy and independent research.

Women are more aware of risks and seek tools to manage it; men tend to ignore it.
Our clients use RiskWise for independent, top quality research services to locate areas with minimal risk and an expectation of solid return. Essentially, they want deeper insights so they can make smarter decisions. As a company, we have never specifically targeted gender in any of our marketing.

However, we discovered that 58% of our website traffic was generated by women – in particular, professional women between the ages of 25 to 44. This is particularly interesting because it fits the rising trend of young women taking more control of their financial future through real estate.

Also, women check the facts and are not easily swayed by opinion. Women follow a strategic process and backs up action with independent research. They have a natural tendency to operate in this fashion, which protects them from high risk and increases their chances of investing with long-term success.


Question: How does being cautious benefit in property investment?

Doron Peleg: Obviously, the greatest benefit is not losing money due to a failed property investment, which is the second common reason sited by Australian for losing money. People invest in property to create wealth and not to become bankrupt.

The second benefit is to see a solid capital growth.


Question: Why do men choose high risk investments more often than women?

Doron Peleg: Men have a higher tendency to gamble and that they are overconfident and immodest. This is based on studies and it is a concern in the property market, where high-risk ventures can have devastating consequences.

Therefore, men are more likely to invest in a 'hot spot' and 'get rich scheme'

To understand the differences in decision-making processes between men and women, we researched -hot spot' investments – investments that RiskWise's historical research has shown are a poor investment strategy.

We collected data from the property professionals who facilitated hundreds of investment transactions in Queensland's booming mining towns in 2011 and 2012. Many of these properties have since busted with the industry downturn.

The data confirmed that the vast majority of the decision-makers in these -hot spot' investments were men.

One professional commented that 'in 2012 men were significantly more likely to think that an investment in a mining town in central Queensland is a better investment than units in the middle ring of Sydney".


Question: What do we need to look for in regards to being manipulated around property investment?

Doron Peleg: First, beware of free educational seminars. These seminars are designed by real estate spruikers to sell off-the-plan – and often low performing – new properties. Many of them are high on the RiskWise 'off-the-plan Danger Zones' list.

Women are more likely to recognise the truth of the situation – that they are not the client at a free seminar, and in fact the seminar organiser likely works for a property developer and has a contractual obligation to sell the properties for the highest possible price.

Men, on the other hand, are more likely to be swept up in the hype and believe that they are the client, and that the organiser of the free seminar will truly act in their best interests.

Also, beware of advertising that appeal to appeal to the visual senses. Men are easily manipulated by that. For example, it's common practice for female models to be hired to stand beside professional sales people at property expo's.

We undertook a study of the real estate agents who hired models in the last several years. Typically, the models increased the traffic to their booth by 50%-100%, with a similar increase in the rate of high quality sales leads, many of which converted into transactions.

It was noted by these real estate agents that even a short absence of the model resulted in an immediate and significant decrease in traffic to their booth.

One of the presenters we spoke to commented, 'you can sell anything to men – you just need a beautiful model who lures them in, has some small talk


Question: What are your top tips for property investment?

Doron Peleg: First, you need to understand that is a property investment goes wrong, this could have a very major financial impact on you. Do not take any decision regarding property investment lightly.

You need to have a very structured approach regarding the process. You need to buy a property. A property should not be sold to you, and there is a big difference here.

You should establish a realistic strategy. Then, on that basis, you set your budget and start considering your options.

You must have an independent research. The research is a crucial milestone that will lead your way to the next steps.
Whether it is done through an independent research company, such as RiskWise, or by doing it yourself, it must be independent.
There should be a full 'segregation of duties' between the person who executes the deal to the person who performs the research.

Relying on the research that is done for free by a property professional carries a very high level of risk. You always need to remember that if you're not paying, you are not the client.

Only once the research is completed, start with the execution - consider specific properties.

Most importantly, do not be tempted to consider an area or to purchase a property that is not fully aligned to your investment strategy and research results.

Our team at RkWise Property Review is happy to help with any question or problem.


Interview by Brooke Hunter