Buying property “off the plan” was traditionally once the domain of serious property investors. Nowadays, it has become a popular option for first homebuyers, largely due to the range of stamp-duty, building and other incentives available. If the thought of dealing with only one vendor to sell hundreds of properties sounds appealing, then you too may wish to consider a career move into project marketing.
This month, Sold Magazine talks to two very successful Project Marketers, John Meagher of 360 Property, and Yal Kaya of SOHO Project Marketing, in order to find out what it really takes to thrive in this specialised field of Real Estate.
Sold: How did you get started in project marketing?
John: I started my career selling domestic Real Estate, and at 24, made the decision to study for my full Real Estate Licence. At the same time, I was approached by a friend of the family, who was a property developer, with a view to helping him sell “off the plan” a refurbished residential apartment project. I ended up spending most weekends learning the craft of project marketing, while my weekdays were dedicated to studying for my license. I started 360 Property Group just over 14 months ago, and we now have 15 staff and offices in Sydney, Melbourne and Hong Kong.
Yal: I came from the “other side”, in that I had a property development background. I had worked with a lot of agents but didn’t quite understand how they marketed our developments. So I decided to complete my Real Estate Licence to get more familiar with the industry. I didn’t really intend to get into project marketing, it just kind of happened.
I established SOHO Project Marketing with Warwick Kent and Johnny Nassif in 2004. There has been a strong demand for Australian real estate from our South East Asian neighbouring countries so we have been working very closely with our co-agents in China, Malaysia and Hong Kong to obtain pre-sales for our vendors.
Sold: What are the key differences between project marketing and traditional Real Estate sales?
John: Project Marketing is a specialised field of real estate, which requires a certain type of person; it’s very different to selling something that has already been built. The art of selling off the plan is about perception rather than reality because the actual dwelling does not yet exist. The fundamental difference is that you must understand the commercial drivers of the project that will make the development a success, and a lot of “subtleties” that go into making a successful project. Understanding demand and supply, both current and future, consumer trends, construction costs and methodology, and how a project feasibility works will all provide a better insight into creating a successful project and, ultimately, a better investment for purchasers.
Yal: Project Marketers are a different breed of Real Estate agent. I couldn’t do what they do, but conversely they cannot provide the specialist expertise we offer. The detailed research and product knowledge required for a successful marketing campaign is very crucial. Our vendors also rely heavily on this information. Project Marketing is also not for the “faint-hearted”, you need to be much more skilled at managing the business aspects because the continual turnover is not there. Commissions are usually paid 50% upon exchange and 50% upon settlement, so at times you can be waiting a long time to get paid therefore your business planning is over a very long period as opposed to a real estate agency.
Sold: What really makes a successful project?
John: A thorough understanding of the market and its driver’s effect the successful outcome of a project. Market research is crucial. We look at things such as current and future supply of housing in various areas, as well as studying demand statistics. We research the demographics of particular areas and work with developers to create a project that meets market demand and has a unique point of difference that make it more attractive to potential buyers and a better long term investment. We conduct thorough research and look for niches where there is less competition, enabling us to take a unique product to the market. It is equally important to have a clear grasp of interest rate trends and funding requirements, both for developers and retail purchasers, as well as construction methodology and costing.
For example, our most recent development (Divercity at Waterloo) has been very successful for us for a number of reasons, but fundamentally because we really did our research. Residents of Surry Hills (NSW) are currently on the move as prices are increasing. Waterloo is close geographically to the area but at the moment is much more affordable and has little to no supporting retail and residential amenities in the current projects such as those seen in Surry Hills. In this project, we believe that we have brought a new level of sophistication in lifestyle to potential buyers at a particular price point which was not previously offered in the area; with the unique point of difference being a range of retail and residential amenities such as cafes, restaurants, gym, rooftop cinema, teppanyaki bar and cantilevered pool.
Often it’s also a balancing act. You have to be careful not to “overspec” the product; you have to provide your market with something that they can afford but is unique enough to provide long-term demand and growth potential. We are always analysing the “take-up” of our projects, both past and present, as well as those of our competitors, and we are continually refining our product knowledge and marketing tactics to suit trends and other market conditions.
Yal: The success of any project is directly related to the success of its marketing campaign. Our vendors rely on us to sell their projects in the shortest possible time at the best possible price. For a project to be successful, the builder, the architect and the marketing company must work very closely. For example, architects sometimes can get carried away with their designs and forget the practicality of a residence. Unfortunately what may look good on drawings will not necessarily sell; therefore it is crucial to get the design right to achieve the best possible result.
Next month we will be launching a development of over 100 apartments in Ashfield constructed by the Youma Group who have been building residential apartments for over 30 years. We have been preparing our marketing strategy for this development for the past twelve months together with Youma and their architect. This early involvement has assisted our marketing preparations and has given us the confidence to achieve great results with this project.
Having more than one development within close proximity to each other sometimes can aid the success of a project. For example, we have recently completed two projects located at Belfield and Campsie, which really complimented each other. In terms of structure, finishing, and facilities they were very similar, however they were priced slightly differently due to the popularity of the particular suburb. If our potential buyer felt one was too expensive, or didn’t like the area, we could drive them 5 minutes down the road to view the other.