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The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.


Category Archives For: Innovation

The Secret Agent Report – Artificial Intelligence in Property

We have just released our latest Secret Agent report!

This month, Secret Agent takes a closer look at artificial intelligence, with a focus on property prices in Melbourne. By examining regression and classification methods, we use machine learning to discover trends and patterns in data.

Access the Artificial Intelligence report now!


The Secret Agent Report – Co-Living

We have just released our latest Secret Agent report!

This month, Secret Agent takes a closer look at the co-living spaces that are emerging across the world. While this trend is something we have seen before, it has re-emerged in a modern form and is changing the way people think about living – and working.

Access the Co-Living report now!


Airbnb: 8 Tips for New Hosts

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Planning on listing your property on Airbnb? Here are a few things new hosts should consider.

1. Location of your property and potential demographic of your guests.

Guests usually plan to stay close to the centre of activity and culture they would like to experience. For example if your property is near a stadium, there’s a high chance your guests may be attending sports events. Think about the biggest demographic of sports attendees and ask yourself the extent of behaviour you would tolerate in your property.

2. De-risk your home against bad apples.

You can request a security deposit prior to the guest’s arrival. Be wary of Instant Bookings, as this does not give you the opportunity to review the guest before they book in their stay. As a final precaution, have your guests sign a contract before they arrive. This can clearly lay out the check-in and check-out dates and times, rules of conduct, deposit refund or any other concerns you may have. While it may put off some guests, those who have nothing to hide should have no problems with signing it.

3. Make sure your home is safe for occupation.

When leasing out your property, it is your property manager’s role to ensure the safety of the premises are kept. If you’re putting up an Airbnb listing, this responsibility falls on you. You’ll need to check that the smoke alarms are working and that heaters (if any) have been serviced in the last 2 years. Make sure that all doors and locks work smoothly in the event that evacuation is necessary. While Airbnb does not conduct any routine inspections on the safety of your property, it’s a simple favour you are doing your guest that may save their life.

4. Check your home insurance coverage for accidents or damage.

You’ll need to fully insure your home against the risk of irresponsible guests causing major damage, as seeking damage compensation from Airbnb is difficult. Read the fine print of Airbnb’s Host Guarantee, and don’t assume it will protect you fully. It also does not cover a refusal to vacate.

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Sustainable Urban Landscapes

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Secret Agent recently reported on sustainability and looked at various ways sustainable features can be incorporated in the design of commercial or residential buildings. In this post, we take a look at sustainability from an urban planning perspective. Sustainability in the urban setting is about “finding new and better ways to achieve the same or better functionality, new materials and new technologies” as demonstrated in the following emerging trends.

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Horizontal-Travelling Elevators

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In the early 20th century it would have been hard to visualise our current urban landscape full of skyscrapers, cars and elevated walkways. Almost 100 years later, it is just as difficult to picture what our future cities will look like.

A glimpse at some of the projects in developmental stages would suggest that we have a lot to look forward to. Take for example what is being achieved with one of the most significant, yet restrictive, elements of modern architecture: elevators.

The concept of the elevator was invented in the Middle Ages. It wasn’t until 1854 that a safety mechanism was designed that would prevent these lifts from falling if the hoisting rope broke. Skyscrapers could then become a possibility, and for the next 150 years or so, elevators would continue to become a staple part of multi-storey buildings. Without any further innovation, the elevator would remain a cable-hoisted box in a single, linear shaft, forcing buildings to comply with its limitations.

Enter ThyssenKrupp, a German industrial group who has developed the horizontal elevator. In 2014, ThyssenKrupp revealed their Multi elevator technology to the world. Using magnetic levitation technology (the same way Bullet trains are powered), the Multi lift system remains cable-free and is not limited to one elevator shaft. These elevators are free to move vertically and horizontally, with multiple units operating within the same shafts. The result is a more efficient transportation system inside and even between buildings.

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AIRBNB – Property Owner’s Guide

The dream of renting out a space for a price far above market rate and paying down the mortgage in half the time or renting a space and sub-letting it out for a profit sounds too good to be true. However with Airbnb that’s exactly what Marshall Haas has done, explained in detail for people who want to crunch the numbers. The savvy Marshall explains how it took a few goes to get the correct formula, but with the right eye and a appetite for risk it seems there is money to be made.

Perhaps the most well documented Airbnb case is Jon Wheatle, who in 2012 had the idea of buying an apartment specifically to rent out on Airbnb and manage it remotely (a testament to the thriving US services economy). He did just that and after hunting around settled for a $40,000 apartment in Las Vegas. He spent $10,000 on the interior and fit out, all up a $50,000 investment and by his current calculations it will take him a little under 4 years to pay the entire apartment off.

But there are perils when renting out your pad on Airbnb, as Ari Teman recently found out. After returning for his bag, the Manhattan resident discovered his apartment being set up for a sex party, which had been advertised for weeks online.

As a property owner or investor how can you make the most of Airbnb? Here a a few hints;

PURCHASE

When buying, pick an apartment with nice volume. It’s not necessarily the square meter size, but the height of the ceiling that can make even the smallest apartment feel roomy. As can natural light and the aspect of the property. Something that is comfortable and aesthetically pleasing. You may be able to photograph a dingy room well, but be aware of your guests ability to publicly share their opinion. Go with a space that has a good feel.

PRESENTATION

When choosing a place to stay (apart from ratings and past referrals) all people have to go on is the pictures. Take advantage of Airbnb’s free professional photography service as this will make a big difference. Interiors and spaces that photograph well are a plus. Deliberately placed furniture and a structured interior are all the rage. So too are interiors with clean lines, deliberate bold pieces, thoughtful colour choices and a modern chic Parisian feel. The art is in capturing a level of warmth, while still remaining clean and chic. Clean modern or classical vintage furniture and a keen eye for art and posters can make all the difference when searching through pages and pages of listings online. Choose pieces carefully and be sure to leave space for your guest’s items.

DETAILS

Little details that you, the host can offer go a long way and will do wonders for that all important rating. It can be as simple as having an Apple TV account with some movies pre-loaded, or a personalised guide to your favorite restaurants and bars in the area. Being on call to answer any queries your tenant might have. This helps maintain a high rating, a critical factor in the success rate of your Airbnb venture. Without it, you can kiss you dreams of paying off the mortgage early goodbye.

LOCATION

Location, location, location – we talk about bundles a lot here at Secret Agent. The concept is simple. The more boxes that can be ticked the better off you are. Close proximity to public transport, bars, restaurants and universities are all very helpful and will increase the rentability of your space. It is essential to know your market and cater to it. Are you after the student, holiday maker, or professional in town for business? Once you decide on this choose your location accordingly.

GENEROSITY

The openness of ones write up makes guests respectful of the owners belongings. For example “full use of our picnic basket is also part of the deal” – these comments attract a certain type of person (fun, urban, adventurer). A good write up can help attract like minded guests who will suit your space.

CASE STUDY IN CARLTON

Athan, a successful airbnb’er argues that many places present well on the site, and it is about differentiating your listing. Check his Beautiful Light-Filled Carlton Pad out for yourself. He differentiates his inner city apartment extremely well, in a holiday rental market that is drawn to either the cheapest price or lavish and unique experiences.

Athan says; “While I wanted the benefits and freedom airbnb would provide, I had a clear framework in mind; I wanted to minimise the amount of displacement I had renting out my place, while maximising the amount of yield per rental to make the most out of my efforts. Basically I needed to make my place less available and more expensive than the rest of the pack. After a bit of trial and error, I found an effective way to rent my place out that matched my specific needs.”

His strategy looks like a classic sales model: Capture your customers attention with key imagery in order to get considered, then use price to translate a perception of quality, and support it with value and assurance.

“You only have one picture to get noticed by potential airbnb’ers. What are they looking for? Warmth, cleanliness, trust. They want to get this perception from the get go. They’re on holidays remember! Your first photo is key to translating this. Try a few different options and test out which photo gets the most hits month to month. You’ll quickly realise what works with your audience. Most people put bedroom shots for their key photo opportunity, however it’s not the bedroom that is always the key selling point. Use specifics to determine what your audience wants and what they respond to best.”

Most people associate certain feelings of quality and value through price points alone. A burger that costs $20 should be of higher quality than the $4 burger, right? Price point helps sell in a vision that the photo alone can’t do.

“…it tells people what you’re worth and the perceived quality they’ll be getting. I played around with pricing to find my premium equilibrium; the point at which it was priced well enough to get the request volume I wanted vs their duration of stay. Started off cheap to get a few reviews, then bumped the price up to where I got zero requests. I have now found a sweet spot. Price strategy also filters out the type of people you don’t want – high prices tend to filter out younger travellers, while cheaper long-term rentals can target specific home-buyers while they look for a property of their own and younger holiday makers.”

One of the key selling points to be considered, is to talk about the value-add and be as responsive as possible adding the human element.

“First, the value. While I charge a premium, I promote that they have $50 credit on the AppleTV and access to US streaming services such as Hulu and Netflix. I also offer my entire pantry and cooking utensils for those eager to get their hands dirty. Basically I want to show them that while they may never use any of these things (travelers tend to want to always be out exploring) that they could have this stuff, and that if no one else is offering it specifically it must mean that this apartment is offering significantly more value.

Then, you want to make sure people feel comfortable with their choice. A lot of people are still first-time users on Airbnb – they’re paranoid that security might be an issue, that it might be a dump and the photos were misleading, and that their personal safety might be in danger in an area they don’t know. I make specific calls out about cleanliness (I use professional cleaners before they stay, not after like most), security of personal items and their safety (I mention the building’s security measures, key and swipe access only, and car park features).

I also assure them from a communication standpoint. Online bookings, especially for an older and less digitally confident audience, tend to feel like they’re not real. A lot of people can feel like they haven’t actually confirmed a booking unless they’ve been in contact with you and discussed some of their key concerns. You need human confirmation to feel 100% confident. Make sure your response rate is as close to perfect as possible – this is what builds confidence in your apartment, versus the other listings that have a low response rates and average reviews.

One other thing you always want when you’re in a new city is the local’s guide to what to see and where to eat. Melbourne is famous for it’s coffee, so what we did is provided a guide to Melbourne’s inner north – the area surrounding the apartment – and made it a feature booklet that is also used to sell the place. Our guests love it, and continue to reference it every time they come back to this beautiful city.”

You can view the booklet here.

At the end of the day, no amount of strategy or sales technique will make a dirty or inhospitable place look amazing. The ultimate strategy is provide a clean and friendly environment, with a thought out interior space and ensure your guests expectations are met and exceeded. Make your place somewhere that people want to stay and give them an accommodation experience that no hotel could ever offer!


Bitcoin and Property

Bitcoin (BTC) has experienced an extraordinary and turbulent run in the market over the past few months. The conversion rate has at times been upwards of $1000 USD per Bitcoin. If you held one BTC for 12 months you could have made returns in excess of 50x.

Paul Osborne and Julian Faelli recently attended Paris’ LeWeb conference (http://leweb.co/) to explore this intricate currency further and shed some much needed light on the topic.

These digital currencies are a serious play now. The fact that we are talking about it seems to suggest it has some real staying power. US senate committee hearings have deemed the rise of digital currencies as legitimate. Property developers in China have started to offer their apartments for purchase with fixed BTC exchanges from a purchaser. Last month there were three independent Bitcoin events held in New York by Wells Fargo, New York State’s Superintendent of Financial Services and the New York City Economic Development Corporation (NYCEDC), an organisation set up to drive economic development, growth and jobs in New York.

Secret Agent was the first company to accept BTC payments within the Victorian market for real estate services. We are proud to welcome Cosmo McIntyre to our team, the catalyst to our start into digital currencies. Cosmo continues to help Secret Agent explore this emerging market.

There are many sceptics; Jamie Dimon CEO of JP Morgan, arguably one of the most powerful bankers in the world, has recently canned the crypto-currency; “it’s a terrible store of value”. While we still think that the risks are great, there is no doubt that Bitcoin has a future in itself or as a catalyst for paving the way for other e-currencies. It has some very interesting attributes recently highlighted by tech- entrepreneur legend Mark Andeessen who is behind such ventures as Digg, LinkedIn and Twitter.

Bitcoin can be bought, sold and transferred for free with no transaction fees, or for a very minimal amount depending on which broker you use. BTC solves the problem of trust, establishing a fool proof method of transferring money between two unrelated parties over an un-trusted network – the internet. The possibility of other digital property being transferred in this way is very real. Digital contracts, digital keys, digital signatures, and digital ownership of physical assets, could be one day safely transferred.

BTC is a very practical solution for micropayments over the internet. Traditionally merchant fees, credit card fees and exchange rates have been a prohibitive factor when wanting to pay/charge small amounts over the internet. Bitcoin’s ability to be almost infinitely divisible makes it the perfect payment solution for micro payments. Online news publications could charge a fee per article, train tickets purchased individually, and songs streamed over the net could be charged on a per listen basis. These are all very viable solutions.

It’s likely that the Bitcoin currency could fail in its quest to be the prime adopted digital currency. However in doing so it will have paved the way for another digital contender to emerge in its place. There are now over 60 virtual currencies. A home purchase taking place with a virtual currency, or even a landlord accepting rent payments are all future possibilities.


2014 – The Secret Agent Report

The diffusion of information theory, radiant orchid and masculine interior design. In this months report, we change up our thinking yet again to explore trends and how they work within the market. Cosmo has created a mood board on Pinterest to back up his thoughts – please see the pinterest board here.

Paul also discusess key themes that we will see through to the end of the decade.

Please visit our Thinking Page to sign up to receive the report monthly.

2014

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Democratic Cities

SOLid Panel
Last week Julian was invited to speak at a panel discussion run by the SOL:id team at RMIT. The evening was led by Michael Trudgeon of Crowd Productions.

Also on the diverse panel;
Eduardo Velasquez + Angelica Rojas (Flinders Street Station people’s choice winner (Architecture)
Scott Mitchell – Open Object (Industrial Designer)
Eli Giannini – MGS Architects (Architecture/Planning)
Michel Hogan – Brand Analyst (Branding)
Tim Longhurst – Key Message (Futurist)

The panel was asked to unpack the following;

How are our city spaces designed and planned? what is the role of the individual in the urbanisation process?  how do grassroots movements impact upon our cities and the cities of the future? what are the implications of open information exchange and open source design?  is everyone a designer? how can design professions adapt in this context?

The wide range of viewpoints both on the panel and in the audience contributed to a robust discussion on the role of the designer in the future of our cities.
It was put forward that perhaps cities succeed and thrive organically – and quite often our best design efforts are where we don’t design a built outcome.


TEDx Sydney: Joost Bakker’s Straw House

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At TEDx Sydney recently I was lucky enough to witness presentations and performances from some incredible forward thinkers and doers. Among lawyers, activists, mathematicians, archivists and political scientists was Joost Bakker; a Dutch born creative operating out of Melbourne. I say creative because Joost’s range of skills are hard to pin down with one word. With a beginning in floristry, he is now designing structures, as well as concepts for ‘closed loop’ sustainable restaurants.

No one needs to be reminded of the devastating affects of bushfire in this country. Sitting at the Sydney Opera House surrounded by water on a cool day, it was hard to imagine the intensity of CSIRO’s fire test on one of Joost’s projects… until he showed us the fire test carried out on his straw house prototype. Reaching external temperatures of 1000 degrees celsius after 30 minutes of ‘major fire front’ testing, the internal temperature peaked at only 35. This classified the straw building as a bunker.

Magnesium oxide board was used to clad the straw house, and the 38 metre square structure was erected in only 7 days. The test was carried out to get the go ahead for a home being built By Joost in the Victorian Otways, an area prone to bushfire.

You can read more about the test, and watch the video here.

From Lauren Bezzina, Secret Agent Communications.