If you have a background in marketing or if you have just started to dig around in the world of property investment, you may have stumbled across the term ‘halo effect’.  This halo effect can be a trap for investors because rather than choosing an investment opportunity based on research and objectivity, people can often make decisions based on bias or familiarity. Peter Gionoli from Investor Assist explains the financial implications of the wrong halo effect.

We talk to one of the authors of a new research model built to increase the accuracy of rental yield predictions. Dr Andy Krause explains how this can be a brilliant tool for investors and we tell you how you can get your hands on the report.

Many home buyers and investors are a little intimidated by the thought of bidding for a property at auction. Michael Yardney points out that if you avoid properties that are up for sale at auction, you’re going to miss out on a lot of good buying opportunities as many of the best properties are offered for sale by auction, particularly in Melbourne and Sydney so he has some tips on bidding.

According to real estate author and buyer’s agent Patrick Bright, the easiest way to keep a renovation on track is to ensure all the tradespeople do their work in the right sequence.  He has some tips on getting the sequence right in a way that may just save your thousands of dollars.

We have some news today that will have major ramifications for investors and property manages and could see some tenants getting into some legal difficulties. Shannon Davis has the news on that.

Lenders should be required to provide off-the-plan apartment purchasers with a funding pre-approval that will last them until settlement according to iBuyNew CEO Mark Mendel. He explains that if banks are prepared to fund a development for construction, then they should take the same stance on providing finance when it comes to the buyers of those apartments.  Hear Mark’s thoughts on that and the other challenges facing the off the plan market right now.

 
Transcripts:
Peter Gianoli - The 'halo effect' and its impact on buying decisions
Kevin:  Peter Gianoli is the General Manager for Investor Assist and is a property marketing and investment expert, and he’s talking to me this time about the halo effect.

Peter, thank you for your time.

Peter:  It’s a pleasure, Kevin. Nice talking to you.

Kevin:  Firstly, tell me, what is the halo effect?

Peter:  Well, I suppose the halo effect has two parts. Number one, it’s probably better known where if you have a look at a property hot spot, where people are constantly looking for property hot spots, the halo effect is the impact of that particular hot spot in and around suburbs around it. So you get a glowing effect of the halo not only from the hotspot but in suburbs around it, and as a property investor, there are opportunities there that are presented.

The other aspect of the halo effect is we all have preconceived ideas. It’s a typical marketing scenario, where each of us have already made up our mind often because of conditioning. So you already have a preconceived idea that the best football team Australia is Collingwood as opposed to, say, the West Coast Eagles, so therefore everything you see regarding Collingwood, you take on a positive message, or it could also be no different to if you’d bought yourself a red car, then you go outside and all of a sudden you notice red cars all the time.

Kevin:  Yes, it’s awareness.

Peter:  If you have a preconceived idea to something, that can have an impact on how you make an investment.

Kevin:  Well, let’s relate this to property, then. What are some of the biases or familiarities or beliefs that we have that sway us in property?

Peter:  It could be house versus apartment. Certainly in Western Australia, apartments are new. The only people who lived in apartments – or flats, as they were – in the 1960s,