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My first rule for successful property investing - stop reading newspapers: Terry Ryder

By Terry Ryder
Thursday, 19 September 2013

When asked by people to list my rules for successful property investing, I always begin by saying: “Rule one, stop reading newspapers.”

Often an audience will react with polite laugher. I have to tell them I wasn’t joking.

Most of the questions I get about property investment are based on misinformation, absorbed from newspapers. Many would-be buyers procrastinate on taking action because of fear, created by relentless media negativity.

People who make calamitous investment decisions – buying the wrong product, or in the wrong place, or at the wrong price, and sometimes all three in the one deal – are often reacting to propaganda disguised as genuine news.

On the subject of real estate, you’re more likely to find misinformation than facts from newspapers.

I say this as someone who started working life 35 years ago as a newspaper journalist and who, until recently, wrote columns twice a week for The Australian. I quit that position because I thought the newspaper was a disgrace to journalism, despite its self-appointed status as a quality national publication.

There’s never been a time when the reporting of news and issues around the real estate industry has been so poor. And I think consumers would be better off if they kicked the newspaper habit and started finding the information they need via the internet.

And, yes, Property Observer is a good place to start. It specialises in property news and analysis, it’s written by specialists and it presents a range of divergent views, without fear or favour.

So here are my top reasons for real estate consumers to stop reading newspapers:-

1). Few newspaper journalists writing on real estate have any expertise on the subject. The outcome, often, is misinformation.

2). There is no expert analysis of real estate information because the writers are not experts.

3). Newspapers regurgitate press release material (propaganda designed to benefit the submitter) as fact.

4). There is little or no scrutiny of sensational statements by those seeking publicity for themselves or their cause. How many times in the past five years have overseas spruikers gained free national publicity by forecasting a collapse in Australian property values?

5). Newspapers present economists as experts in real estate analysis, despite their appalling track record on the subject.

6). The misinformation in newspapers can cause consumers to make bad decisions.

7). The tone of newspapers is overwhelmingly negative. Witness how the first signs of city price growth in three years have been turned into a screaming negative (it’s a bubble and we’re all going to die!).

8). Anyone willing to make sensationally negative comments on real estate will always get a run in newspapers, their lack of credibility notwithstanding. The ongoing profile of failed forecaster Steve Keen is a fine example.

9). Newspapers sensationalise – everything. Values never fall, they plummet. Prices don’t rise, they soar. Every property development ever proposed is “controversial”. The result is distortion of reality.

10). Too often newspapers present real estate spruikers as folk heroes to be admired. In reality, they’re people seeking to exploit real estate consumers for profit. When the crook is eventually exposed, newspaper will savage the monster they helped to create.

11). Many newspapers present real estate advertorials (paid advertisements dressed up to look like articles) as genuine news.

12). Newspapers report the real estate past, when investors want clues about the potential future. If you’re reading about a “hotspot” in a newspaper, it’s already too late to buy there.

13). Newspapers censor material that is seen as harmful to the publisher’s commercial or political interests. The truth (often information consumers need to know) is suppressed or distorted. Newspaper journalists appear happy to let it happen.

14). Mistakes in newspapers are picked up by other media and repeated as facts. An example is the newspaper report, some years ago, that RBA Governor Glenn Stevens had said he was concerned about a real estate bubble. This was repeated around the nation as accurate information, when Stevens did not say that or anything like it. (That was the birth of an endless stream of bubble stories ever since).

Do yourself a favour. Find other sources of real estate information.

Read more: http://www.propertyobserver.com.au/hotspots/my-first-rule-for-successful-property-investing-stop-reading-newspapers-terry-ryder/2013091865120