Why I Don’t Like Property Crowdfunding

Brandi Krauss @GoodPlaceHQ Given Malaysians are almost always laggards when it comes to adopting anything new (let’s not kid ourselves – we have never been the innovative kind), we just need to look at what’s happening elsewhere (say, the United States) to predict what’s going to catch on here later.

It makes a lot of sense if you think about it. In fact, just look at the most popular sites in Malaysia. Job sites? JobStreet was definitely not the first. E-commerce? Ebay and Amazon predate Lelong for donkey years. Property portals? Don’t even get me started. 🙂

What this means for local entrepreneurs is that there is no incentive to be innovative. In fact, if you want to make it as an online entrepreneur on this side of the world here’s a surefire way:-

  1. Find something that is already working elsewhere.
  2. Copy it.
  3. Launch a local version.
  4. Go public.
  5. Cash out.
  6. Go on exotic holidays, post selfies with supermodel girlfriends, liberally use hashtags like #startuplife, #ballin and #justdoit (yeah yeah)

Now I am making that sound easier than it actually is, but I know the plan works because there’s this rather enterprising individual who has done it, not once, not twice, but freaking THREE TIMES. If you’re in the online startup circle then you’ll know exactly who I am talking about here, and no, I’m not naming names!

Of course, like tons of startup entrepreneurs out there, I have been tempted to follow the same path to fame, fortune and notoriety, but now that I am married with three kids my priorities are somewhat different from the typical starry eyed 22-year-old fresh out of college aspiring to be the next Zuckerberg. These days, I’d rather spend an afternoon at home playing father to my three toddlers than to frolic with supermodels taking selfies on a yacht off Selat Melaka. 🙂

But I digress…

Michael Bolton

Buyers Need To Consolidate Their Power

In my blog post published two weeks ago, I had argued that in order to bring prices down, buyers will need to consolidate so that they have higher bargaining power vs the developers. I therefore laud initiatives that enable buyers to do this – such as iProperty’s Buyers Club. Indeed, if iProperty is able to pull this off, it will be a true game changer in the industry by putting the power back in the hands of the buyers.

To tie back to my earlier point about “localizing innovation” (sorry for the jargon), iProperty’s Buyers Club seems to take its cue from property group buying sites in China (I could be wrong). Another type of these buyer-centric platforms is property crowdfunding – which has originated as offshoots of general crowdfunding sites like Kickstarter and Indiegogo.

To the uninitiated, the concept of property crowdfunding is simple:- you get a bunch of people to pool money to buy property. When you sell (flip) the property, you then distribute the profits to the group. Similar to the syndicating idea which I have talked about here, here and here, but there are some crucial differences which I am going to talk about below. But first, I gotta let you know…

I don’t like property crowdfunding.

This idea just so wrong in so many ways. Let me tell you how so.

 (Property) Crowdfunding Sites Are Guru Platforms

These crowdfunding sites are already mushrooming in Malaysia as I am writing this article (just do a Google search). It therefore wasn’t hard for me to locate one to do some investigative work. 😉 When I emailed one of them to ask about how the process worked, this was the bog standard reply which I received –

First, our investment experts will work with only the top developers to get deals with high returns. These thoroughly vetted deals are available to be selected by the user upon registration at our website. Then all you have to do is to enter the amount of money you’d like to invest and fill in a form online to formally submit your application to invest. Once the amount of money is raised, then you’ll be certified as an investor of the property (sic). You can then enjoy the profits when we sell the property, or alternatively you can also sell your investment to a third party.

GoodPlace.my

If you’ve got your Guru BS detector up, then Godzilla-sized alarm horns should be blaring at full volume in your head when you hear phrases like “investment experts” and “deals with high returns“. Think about it for a moment. If a deal is truly “hot” with “potential of high returns”, the truth is that it won’t need to turn to crowdfunding platforms for financing. Banks will trip over themselves to give them money.

And likewise, why would an “investment expert” make money from charging a small fee (presumably) from running a crowdfunding platform than to do the “hot” deals himself and make money from the capital yield? Quite a paradox if you ask me.

Here’s the bottom line: the whole scheme reeks of a Guru scam, and as we like to say here at GoodPlace HQ, if it looks like a duck, walks like a duck and quacks like a duck, it ain’t no freaking chicken.

Quack quack

You Can’t Get Your Money Back

Given the long(ish) lead time between buying and selling property (unless it’s a wholesaling deal – quite unlikely), for most participants of the scheme the only way to make money is to sell their investment to another participant. And this is where the huge chunk of the problem lies… because you’re now trying to sell your “investment” off to another guy who presumably would want to buy with the hope of selling it off again to another person (sucker?) at a higher price.

Ponzi scheme, anyone?

  Do I Smell… Jail Time?

I am not saying that property crowdfunding is inherently illegal, but we are talking about super grey area here. And as much as I dislike overarching regulations which (often unnecessarily) impede the free market, but the Securities Commission (SC) should really take a closer look at the inner workings of these schemes. That’s all I am going to say.

Monopoly man

ADDENDUM: The Securities Commission has released some guidelines for equity crowdfunding (see this). Expect more regulatory intervention in this space in the coming year as more of these crowdfunding schemes pop up.

So Here’s The Bottom Line…

If you want to invest smaller chunks of money over a large portfolio of properties, here’s what you should do: go for REITs (real estate investment trusts) instead. Crowdfunded property deals are just shady business. And who knows, they could well be a scam to siphon money from unsuspecting grandmas into the pockets of slimy gurus and unscrupulous developers working in cohorts. Why take the risk?

Believe me; when it comes to “money making opportunities” in the property space, you can bet that I can smell dog poo poo from two miles away. Property crowdfunding stinks.

Is Property Group-Buying Bullshit?

GoodPlace.my

To some people, group-buying sites like Groupon and Living Social are as deadly addictive as Justin Bieber jingles to giggly prepubescent girls. I know this firsthand because my wife is a bona fide deal sites junkie. Her bedtime reading habits have shifted from trashy housewife novels and teenybopper magazines to “deals of the day” email spam from the twenty gajilion group buying sites that she has subscribed to. Hubby, look at this Kitchen Aid thingamajig! Now only RM2,000 online! Oh, my!

Given the popularity of the group buying and online flash sales sites these days (their dodgy business models notwithstanding), it’s therefore not surprising that there are enterprising types out there who would try doing the same for property. In fact, there have been at least two fairly high profile attempts that we have seen so far in this country, and as far as I know, the results have been rather underwhelming.

Last week one of these companies came over to see me at the HackerHub, and I was told firsthand that they were abandoning the group buying concept, turning itself instead into a PR firm. I was somewhat gutted by this because I was rooting for them – not because the company’s founders were my buddies (I didn’t know them), but I had wanted the “group buying for property” idea to work.

Now first let me clarify something here. Just for the record, and for those reading GoodPlace for the first time, I find property gurus and their hare-brained schemes as despicable as they come. But we are not talking about gurus here. What they do is a special case of group buying where the guru followers would pool their money and buy whatever their guru tells them to (in bulk).

Instead, what I am addressing the generic case where the group buying opportunity is open for the general public. In short, we are talking about a “Groupon for property“, not a private investor’s club where people pay $997 a year to join.

Here’s Why Property Group Buying Can Be A Good Idea…

I know what I am going to say next will piss off some people, but then again, I own this blog, and I can say whatever I want because I am not beholden to anyone. Recently the group buying concept has taken yet another bad rap with the agent association head honcho Siva Shanker firing the latest salvo in a BFM podcast.

I have a lot of respect for Siva, and we both share the same distaste for gurus and the snake oil scams that they pull. However, there were a few points he raised in the podcast that I couldn’t bring myself to agree with.

For one, Siva didn’t have a single good thing to say about group buying. On the contrary, I think that group buying can be hugely beneficial to the home buyer – if done properly and transparently (this is key).

If we look at the consumer group buying vertical in totality (Groupon, Ensogo, etc), it’s obvious that the consumer is the biggest winner in the whole deal (pun intended). With these deal sites, consumers get wider choices AND cheaper prices (sometimes as drastic as 80-90% off retail). From what I can tell, not a whole lot of merchants benefit from these deals (and there were businesses which went kaput because they were forced to sell in large volumes at a loss). This may surprise some people, but the deal sites (as a business) are not doing too well either.

As any freshman economics major would tell you, prices are a function of supply and demand, and whenever there’s an aggregation of demand, prices fall. What the deal sites effectively do is to “aggregate” demand to increase the buyer’s negotiating power over the supplier, resulting in cheaper prices.

Welcome To The Free Market

Perhaps it goes without saying that in the Malaysia property industry, the developers hold the pricing power. This should not surprise anyone as the supply of homes is concentrated among a smaller number of developers when compared to buyers. Additionally, there have been further consolidation among developers (UEM acquired Sunrise in 2010; SP Setia may merge with E&O and Sime Darby; PJ Development with OSK Property) which means that this concentration of power will only increase.

With the smaller number of developers controlling the bulk of supply of new homes, pricing is getting quite inelastic these days. Given rising material and labour costs as well as the impending GST come April, profit margins will get kicked down the curb unless the developers do the unthinkable (*sarcasm*) – raise the prices.

If you’re wondering why prices of properties are still stubbornly on an upward trend despite significantly lower transactions this year then this is the reason. The smaller number of suppliers (i.e. consolidation of developers who are already usually working in a cartel-like environment by default) vis-a-vis buyers mean that they (the developers) have absolutely no (economic) incentive to lower prices.

Still, don’t get me wrong – the developers are not to blame in this scenario. They are a business with the profit motive as their raison d’être; social responsibility is secondary to making money. And understand that this is not a bad thing. It’s just how the free market works.

Let’s Just Put Them All Behind Bars

Now there will be those who will scream bloody murder and want the government to do something about it (sell cheaper or go to jail!). Indeed, many are of the opinion that properties are too important to be operating in a free market with minimal regulatory intervention. After all, the roof above one’s head is human necessity which is as fundamental as food and water.

I don’t want to sound like a Ron Paul-worshipping, Ayn Rand-quoting libertarian nutcase, but appealing to authority to solve problems in the economy is like asking the fox to guard the hen house – it’s stupid and counterproductive. I’ve never been a fan of top-down regulatory enforcement because we have seen again and again that free market forces always work things out for the better – but only in the absence of government intervention. Protectionism may be popular in the short-term, but is inevitably harmful in the long run (cough, Proton, cough).

And as such, I don’t even want the government to throw the proverbial book at those scummy guru/investment club types because all of them usually implode after a few (two?) rounds of scams with the buyers losing their shirts. You heard me right – “investors” (snigger) who participate in those schemes deserve to lose all their money, and then some. Remember – you lose money only when you are greedy.

Now given that it’s not illegal for developers to consolidate their powers and increase prices, and, it’s against the spirit of laissez-faire for the government to step in and arbitrarily stop the price increase, there’s only one natural solution to this conundrum…

To bring down prices, home buyers must aggregate their buying power.

Group Buying Is Not Bullshit… It’s The Home Buyer’s Next Best Bet

There’s absolutely no reason why a “Groupon for property” can’t exist. None. And given that the developers yield so much pricing power in the industry, property group buying sites might just be the platform which home buyers need to aggregate their buying power to balance out the developer.

Now I’ll need to further qualify my statement above as it does not extend to the schemes peddled by property gurus through their investment clubs and weekend seminars. A scam is a scam, and these snake oil peddlers don’t get a free pass from me.

So far, the public property group buying sites in Malaysia have been reporting rather mixed results. Like what I have mentioned earlier in this article, one has thrown the towel and turned into another PR vendor. The other is, of course, iProperty’s Buyers Club.

Now obviously I am not privy to iProperty’s business plans and inner workings, and what I know is what’s already shared publicly. For example, here’s a video on YouTube of their big boss man talking about their group buying business at a seminar end of last year. Amusingly around the 8:10 mark, he said that he was proud that they’ve done a terrible job at it (lolwut?) although they have had sold some 50 apartments online up till that point in time. (I don’t know what his expectations were, but my gut tells me that he wanted to do better.)

And what’s obvious to me now is that there is a screaming need for a group buying platform which delivers its core promise – cheaper prices for home buyers. There’s already a couple of early entrants with a number which has bitten the dust… and so the market is still wide open for now. So, for you enterprising types looking for a startup idea with huge upside, this might appeal to you – but only if you’re unfazed with sticking your nose into a hundred ton behemoth like iProperty. 🙂

Budget 2015: The Skinny

GoodPlace Girl holding a piggy bank

Response to the recent Budget as announced by PM Najib Razak recently have been rather muted in the blogosphere because let’s face it – it’s rather ho hum with very few surprises. “I can’t believe I actually bothered to watch it live,” GoodPlace reader George emailed this morning, “I was as bored as a 50 year old dude in a Justin Bieber concert. It was excruciating.”

But of course, you get your fair share of cheerleaders who enthusiastically raved for the PM, and on the other side of the fence, haters who couldn’t (wouldn’t?) see any good in anything that the PM did. GoodPlace is as apolitical as it gets, and so here’s our impartial assessment of the Budget: a B-. 🙂

And for those who didn’t bother to watch the Budget or to read the newspapers the next day, here’s the skinny as far as property is concerned:-

  • RM4.5 billion for infrastructure projects and upgrade of rural facilities.
  • Youth Housing Scheme: RM200 monthly assistance for married youths between 25 and 40 buying their first homes (<RM500,000).
  • 80,000 homes for PR1MA. Household income limit increased to RM10,000 (from RM8,000 previously) for eligibility.
  • Rent-To-Own scheme for buyers unable to get financing from the banks.
  • 50% stamp duty exemption for first-time home buyers
  • Housing loans for civil servants: minimum and maximum eligibility now stands at RM120,000 and RM600,000 respectively.

What We Like

  • The infrastructure projects. Connectivity is what drives the fringe areas and enhances the spillover effect.
  • 50% stamp duty exemption will help first time home buyers.
  • No increase in RPGT.

What We Don’t Like

  • Nothing which directly addresses the slowing property market.
  • No initiatives to improve public transport.
  • The Youth Housing Scheme RM500,000 limit may be sufficient for now, and will be increasingly tight for the next couple of years.
  • 20,000 units allocation under the Youth Housing Scheme is not enough.
  • No re-introduction of DIBS for first time home buyers (despite the intensive lobbying by the industry players).

What do you think of the 2015 Budget? Let me know below.

Buying & Selling Property On Social Media – Really!?

Shirley Chan at GoodPlaceHQ, Setiawalk

Yesterday a good friend of mine James (name faked to protect the guilty) sent me this article on the Internet habits on Malaysians; apparently we (Malaysians) now spend five hours online everyday, and three out of those hours are spent on social media (mostly on Facebook possibly). “Khai Yin, time to wise up,” James (who, like me, was also running a startup) had said. “Your business can’t afford to ignore Facebook anymore.”

You see, I’m really not a big fan of social media. Personally, I am hardly a Facebook user, and for GoodPlace, social media is never high on the priority list. Trying to get eyeballs in Facebook can be tough and time consuming given the amount of clickbait crap that clutters up the place (“This model took off her underwear in a crowded street. You won’t believe what happens next!”). And truth be told, I’d rather spend time writing better articles than to figure out how to game Facebook for a couple of shitty clicks.

clickbait

For property agents or sellers, on the other hand, social media CAN be important. In fact, in the United States, it has been estimated that more than 80% of real estate professionals use social media actively to reach out to home buyers. Being laggards as we as Malaysians have always been, I would estimate that there are less than 20% of agents in this country who actively use social media to reach consumers, but one can reasonably expect this figure to grow because of a couple of reasons –

  1. Free eyeballs. It takes time to build up a following, but you’ll be able to reach your audience (sort of) for free (sort of).
  2. Authenticity. Agents come across as “real” as you can see their selfies with their pet puppies.
  3. Referrals. You can see who your mutual friends are with the agent. She’s my auntie’s second cousin’s piano teacher’s daughter, so…gotta be legit.
  4. Free form. Pictures and posts not limited to the “listings” format a la property portals. Also, ability to post videos.
  5. Interaction. Agents can directly engage potential buyers via comments, or even better – get them to share the listings to their friends.

So far, so good, but as with anything else, if it sounds too good to be true, then it probably is. 🙂 Given how efficient capitalism is (even in this country), if social media really works better than, say, the traditional property portal listings then we should have a good number of startups in that space already. If Facebook really works for buying and selling property, I, for one, will be all over this like kari kepala ikan on rice. 😉

So, if you want to actively hustle properties on Facebook, then let me try to persuade you NOT TO DO IT for these reasons –

  1. People are on Facebook to look at pictures of cats, ridiculous pictures that make you go WTF, and more pictures of cats. They ain’t there to look for things you wanna sell them.
  2. On the other hand, people with INTENTION to buy property will already go to Google (if they are in the research mode) or iProperty (if they want to look at listings) or the GoodPlace DealMatcher (if they are smart/savvy/good looking/all three). Only when they get tired of those sites, they will go to Facebook… but to look at pictures of cats, not your shit.
  3. If your existence on Facebook only to flood people’s timelines with property ads, then your posts won’t appear that often (if at all) in because you’ll be reported as spam by overzealous people.
  4. If you then find your posts getting blocked, then the only thing to do to make your stuff “appear” is to bribe Mark Zuckerberg (i.e. to buy Facebook ads).
  5. If you’re an agent, and you think that uploading listings to property sites is a pain in the behind, what makes you think that creating Facebook posts and filling them up with pictures and videos is any easier!?
  6. If you’re an active buyer, looking for properties on Facebook (why oh why) is like trying to buy a wedding gown at Low Yat Plaza.

In short, if you’re telling me that you’re gonna use social media exclusively to get your deal flow then I can only conclude one thing…

Clueless Dog Meme

How About Property Groups On Facebook?

Online forums (I don’t wanna name them) used to attract hoards of people who would talk about properties (in particular, upcoming launches) and also share “tips” on how to make money by looking for the next sucker to sell their DIBS-laden crap to. Unsurprisingly, these places are bursting at their collective seams with gurus peddling their scammy $997 (their prices always end with 7 for some reason) “how to make teh moniez” seminars to unsuspecting (and greedy) newbies.

Craploads of moolah!

Many of these guys have since moved on to Facebook to form groups (no, I ain’t naming them either), but to be completely fair (I can’t believe I’m saying this), they can be a good source of “on-the-ground” information which you can use as part as your due diligence (for a new launch). Additionally, you get to connect with people with real passion for property and tap into their collective wisdom – although you will still need to look out for keyboard jockeys and shady negotiators posing as impartial bystanders subtly trying to nudge you to look at their stock. Remember to exercise the same caution as you would when you look at listings at property portals.

TL;DR version – Treat social media as a source of information, not a place to look for properties to buy or to sell. And don’t forget to turn up your BS detector!

Property Portals: The Google Deathmatch

GoodPlace iProperty PropertyGuru Propwall

Let me first get this straight. GoodPlace is not in the property classifieds business, and as such we are not in competition with iProperty, PropertyGuru and Propwall. However, as Google remains a major source of traffic as far as Malaysia property searches are concerned, we are all in a way competing for the same keywords, and by extension, the same SERPs (search engine ranking positions).

Over-dependency on Google is never a good thing, but the reality is that a good chunk of property buyers in Malaysia go to search for properties online to either research and/or to look at listings. Therefore, there’s really no breaking free for property sites from Google at least for the foreseeable future.

Having said that, iProperty’s dependency on Google is signficantly less than the other players in the online property space since being the market leader, it has somewhat achieved strong top-of-mind awareness (much like JobStreet.com in the jobs vertical). This means that iProperty enjoys substantial “type-in” traffic (both on the browser, and through mobile apps).

On the other side of the spectrum, Propwall still relies heavily on search (in fact I would estimate that as much as 75-80% of its traffic comes from Google). PropertyGuru (the number two player in Malaysia) is somewhat between the two in terms of brand recognition (which correlates heavily with direct, type-in traffic) and reliance on search traffic.

(In the case of GoodPlace.my, about 40% of our visits are from search, with “direct” visits as well as email (from our GoodPlace Digest subscriber base) constitutes more than 50% of our traffic.)

We can all perhaps agree that traffic from Google remains of high(er) quality (especially when compared to social media and incentivized platforms like, shudder, Adfly). For this reason, unless there’s a drastic change in home buyer behaviour online1, whichever site which achieves dominance in Google will have a leg up against the others.

Measuring Visibility In Google

As any seasoned SEOer will tell you, chasing “top” rankings is a typical rookie mistake. What property sites (or any website for that matter) really want is VISIBILITY, not any arbitrary search ranking position.

Alas, there’s no one standard way to measure visibility, and indeed, different SEO vendors and SAAS providers will have their own methods which are proprietary to their own product or platform. Do a quick Google search on “SEO visibility” and you’ll see some pretty divergent definitions and measurement methodologies.

What most of these SEO consultants miss out, however, is the fact that Google can behave rather erratically across different niches which means that a singular visibility measure is rather meaningless. There are three reasons for this:-

  1. SERPs in “spammy” verticals such as payday loans and penis enlargement pills will report wildly different CTRs with respect to their SERPs when compared to, say, flower arranging and stamp collecting.
  2. SERPs have different compositions across locations and niches with the presence of local listings as well as videos.
  3. The knowledge graph affects outbound CTR (usually negatively) for a good chunk of informational queries (“How do I…”).

Now my interest in SEO is entirely selfish; I’m analyzing the SERPs only so that I can make GoodPlace more visible in Google. For the rest of this article, I shall be deriving a visibility measurement methodology for Malaysia property online. This methodology is vertical agnostic, so feel free to adapt it for your own use if you are into traction hacking for your startup like me. 🙂

Visibility Scores For Malaysia Property SERPs

Ultimately, the visibility metric is only useful if it describes how websites stack against each other in terms of garnering clicks from Google by virtue of their rankings. Therefore, in the context of Malaysia property, I will need to correlate the search ranking position in the Malaysia property niche with the click volume associated with that position.

For this purpose, I’ve used the CTR data of a site which has been collecting Google clicks for search in the past 18 months through the very handy Google Webmaster Tools

Data on GWT

I’ve also cross-referenced the traffic numbers with my own server data and they are in a very workable +/-10% range.

Mapping CTR against SERP position yielded a very familiar curve which you would see in any SEO visibility analysis where we observe that the top three positions would take the lion share of clicks on the first page of Google:-

CTR distribution chart (Malaysia property)

We shall then be assigning weightages to reach ranking position reflecting the share of the clicks (normalized to the total clicks on the first page of Google) associated with that position (see this table below) –

Visibility Weightage Table

Average PositionCTRNormalized Weightage
1-1.531.028.6
1.6 - 2.519.217.7
2.6 - 3.514.813.7
3.6 - 4.512.411.4
4.6 - 5.55.14.7
5.6 - 6.57.16.5
6.6 - 7.56.25.7
7.6 - 8.54.54.2
8.6 - 9.54.23.9
9.6 - 103.73.4

From here, we will be computing the visibility scores for all the property sites in our consideration set using the following methodology:-

  1. List out the keywords that we want to use in our analysis. In this exercise, we are focusing on three areas: KL (city centre), Bangsar and Mont Kiara. For the complete list of keywords we have used, click here.
  2. Query Google.com.my (note: NOT Google.com) for the keywords in (1), noting the SERPs for all the sites in consideration. There are software that you can use to do this, but take note that it’s against Google’s TOS to send it automatic queries. So, be careful, and be creative. 😉
  3. Tabulate your data, and assign the weightage factors accordingly (see the table above).

Our Findings

We have performed the crawl on August 17th, 2014, and so this analysis is accurate based on the Google SERPs data on that date. If you’re running this analysis much later, you may well see some differences especially given the fluidity of the SERPs at the moment with the relatively frequent algorithm changes.

Property portals visibility on Google

Let’s see how the property sites stack up against each other in terms of visibility on Google.

iProperty

The biggest property portal in the country, iProperty seems to be relying less on Google searches now than, say, three years ago. I’ve also observed that they are also buying much less PPC traffic off Google nowadays (leaving the field wide open for the likes of PropertyGuru – more on this later). In short, they seem to be scuttling their investment in SEO/SEM, preferring to spend their marketing monies elsewhere.

Here’s a sample of their SERPs since end September last year (Binjai Residency as proxy for KLCC, La Grande Kiara for Mont Kiara and One Menerung for Bangsar); many other keywords that we track are occupying the 4th to 6th position range in Google:-

iProperty SERPs

Market leaders for classifieds businesses (jobs, cars, properties) typically have strong “direct” channels by virtue of their top-of-mind brand awareness. It makes sense at this stage for iProperty to disproportionately invest in branding (i.e. through expos and traditional PR) than to continue dabbling in SEO.

PropertyGuru

PropertyGuru is the second biggest property portal in Malaysia according to Alexa (ranked #104 in Malaysia overall; iProperty is #50). Since we started tracking its SERPs in September last year, we have noticed a slight “dance” between the 5th to 8th positions. The coveted Top 3 positions are usually taken up by Propwall, developer websites, Google services (notably YouTube and Google+ profiles), and in the light of competition, PropertyGuru is fighting an uphill battle to gain good visibility in Google.

PropertyGuru SERPs

I have also noticed the ramping up of Adwords spend for the last couple of months; perhaps this is to compensate for dipping organic search traffic? Well, your guess is as good as mine. 🙂

Propwall

Make no mistake about it – as far as SEO goes for Malaysia property, Propwall is the big kahuna. Its SERPs appear in the Top 3 for a good majority of our keywords universe, nd as such, our visibility analysis, it’s the winner by a clear mile. In fact, its visibility in the Mont Kiara and Bangsar SERPs is about three times (!) the next guy, iProperty.

Propwall SERPs on Google

We will analyze the reasons for Propwall’s superior rankings in the search engines in the Key Takeaways section below.

GoodPlace Network

Despite being the newest kid on the block (our maiden post at GoodPlace.my was published in June 2013), we have been holding our ground in the search engines. Our visibility in the Mont Kiara SERPs is comparable to iProperty, and we are just behind Propwall in searches for KL city properties, ahead of both iProperty and PropertyGuru. Not too bad for a one-year-old network of websites.

Our visibility in KL city property SERPs is pretty much driven by our sister site KLCCcondominiums.my where we have got a number of #1 rankings under the belt. Propwall still reigns supreme here, but we find ourselves in a good place to garner more organic clicks especially when our rich snippets (ratings and author name) actually show up in the SERPs2.

GoodPlace sites on Google

Comparatively, our performance in the Mont Kiara and Bangsar SERPs is rather mediocre, but this is perhaps a consequence of over-investing in KLCC as part of our pilot SEO project (at the expense of the other areas). We could have just repeated what we did for KLCC for Bangsar and Mont Kiara, but at this stage of our startup we are focusing more on referrals and product development, and as such, don’t expect much SERP movement at least in the next couple of months. 🙂

Two Key Takeaways

1. Google Disportionately Rewards Content Sites

This may be seen as self serving for me since GoodPlace sites are primarily content plays, but I’m merely explaining the reasons behind Propwall’s dominance in Google here.

I’ve analyzed Propwall’s backlink profile, and while it’s not too shabby, there’s really nothing that really stands out about apart from the obligatory backlinks from its parent (The Star) and a couple of property agencies. In comparison, iProperty has arguably better backlinks (save for the sitewides from its partner portals – not good) with an aged domain with stronger authority. However, since Propwall seems consistently outrank iProperty, we can safely conclude that Propwall wins on the back of its superior on-site factors3.

Pushing this hypothesis a little further, note that Propwall has both content (property reviews) and classifieds pages devoted for property keywords, and guess what – (usually) the content pages get ranked but not the classifieds. Content on pure classifieds plays such as iProperty and PropertyGuru is comparatively thin which puts them at a disadvantage as far as Google is concerned. In fact, I wouldn’t be surprised if the classifieds portals were actually slapped with a light variant of Panda (dropping them from the top to the middle of the first page) given the thin and duplicative “content” in the form of copy-and-paste listings and pictures.

Finally, as an additional point of validation of this hypothesis: GoodPlace Network websites are purely content play, and we can attribute our visilibity in the search engines (despite our short existence) to one thing – our content.

2. Social Profiles, Developer Websites & Niche Sites Get Extra Love

Post-Penguin, on-site factors, user engagement, brand and domain authority are getting amped up at the expense of backlinks volume and keyword anchors. Also, as searches tend to be in the form of [property name], [property name price] and [property name review],”local” factors such as proper KML / Schema.org tags as and local citations can also be important.

Consequently, in the context of SERPs in Malaysia property, the following types of websites get a leg up in Google:-

  1. Social profiles in the form of Google Local and Google+ profiles. We have seen agents (and one property portal which we shall not name) use (abuse?) this loophole to gain top SERP rankings with little to zero offsite optimization.
  2. The property’s official website by the developer. This usually benefits from a strong brand, a keyword rich domain name, and authority backlinks from the parent (i.e. the developer).
  3. Niche sites. With all things being equal, there is evidence that Google favours niche, authoritative websites over large “farms” offering generic or thin content. This is of course not exclusive to property searches only; the original Panda filter was created to degrade the performance of content farms such as eHow, Ezinearticles and Hubspot, giving room for smaller, authority sites in their respective niches to gain more visibility in Google.

To illustrate, here’s the screencap of the SERPs for the keyword [marc residence] in Google.com.my4 minus the paid placements (Adwords):-

Marc Residence in the SERPs

As shown, a Google+ profile occupies the top spot. Upon further checking, the profile is scarcely populated even with the basic NAP information and local reviews with absolutely no backlinks. It’s astounding that Google thinks that this page deserves the top spot since it offers little value to the searcher. However, the reality is that the algo seems to heavily favour local business profiles to appear whenever a local search query is entered.

Occupying the second and third spot are “deep” pages from Marc Residence’s developer, the Beverly Group. These clean, static HTML pages benefits from its branded parent domain, inclusion of NAP information (again, a “local” effect) as well as some local citations from contextually related sites like Hotels.org.my (Malaysia’s association of hoteliers), PropertyCafe (a property blog) and another property portal.

KLCCcondominiums.com.my’s entry on Marc Residence occupies the fourth spot – we have in fact dropped from the third the last time we did a crawl a month back (possibly due to another yet unconfirmed Google update widely rumored to take place at the end of July). Our rich snippets are showing up in full force (the numeric and starred ratings as well as the author’s name – mine) despite being filtered out in the last Google update on rich snippets spam in the end of 2013, and our internal data showed that CTR improved by some +15% from the display of rich snippets.

Rounding up the first page SERPs is another content-heavy site Propwall, followed by listings pages from “pure” classifieds websites like iProperty and PropertyGuru. We have indeed observed a fairly consistent “local & content sites over listings” pattern across the SERPs, and this presents a good opportunity for property sites to get more clicks from Google – see the next section.

Property Portals: How To Get More Traffic From Google

I will repeat the disclaimer at the start of this article here: while GoodPlace is not in the classifieds business, we are competing with the others (notably iProperty, PropertyGuru and Propwall) for the same clicks on Google for the same property keywords. Unfortunately, search is a zero sum game (there’s only X number of SERPs on page one of Google), and as such, an increase in our visibility correlates to the decrease in another. For this reason, logically I would presumably have no incentive to share with anyone else what’s working for GoodPlace so far, SEO-wise.

But having said that, I firmly believe in open sharing even in an industry which is “closed” or opaque (by design) like property. Indeed, GoodPlace exists to make information flow more freely in the Malaysia property industry, and this blog post is therefore completely in line with our raison d’etre.

In fact, I believe that the industry will greatly benefit from an initiative such as Simon Baker’s hugely admirable Property Portal Watch which organizes a series of conferences around the world which gives a platform for (often competing) property portals to share ideas and work on collaborative projects. But alas, something like this may not attract much traction amongst players in the Malaysia property industry which is seen to be more “combative” rather than collaborative these days. But I digress…

Alas, SEO will never be my bread and butter; I’d prefer to work on building a rockin’ product and drawing inbound traffic without an intermediary (this also explains why I’m also not that enthusiastic about building up a Facebook or Twitter following). However, if you’re running a property portal and you want to fortify your search engine visibility then consider these ideas:-

  1. Measure visibility instead of rankings. Use data from Google Webmaster Tools and cross-check with your internal analytics.
  2. Deploy a more holistic content strategy which gets stitched into the listings with cross linking to make internal link juice flow more freely. Hint: see what Propwall does.
  3. Develop social profiles more fully with (legitimate!) reviews and high quality local citations.
  4. Increase quality of listings with unique copy and pictures as well as NAP information. Annotate with microdata if possible (see Schema.org).
  5. Delete duplicative listings (beware of the vicious Panda!).

ADDENDUM: I’ve received a couple of emails asking if I provide SEO consulting services. Short answer: no. Long answer: No, because I’d rather work on my own sites, thank you very much. 🙂

  1. In the US, 90% of home buyers searched online during the buying process – http://www.scribd.com/fullscreen/119294431 – I don’t expect Malaysians to be different
  2. Google has since cleaned up “rich snippets spam” and removed author pictures from the SERPs
  3. This is consistent with the (perceived) re-weighting of Google ranking factors in the favour of on-site elements.
  4. If you’re doing this search yourself, remember to log out from any Google account, clear your cache, and if you’re on Chrome, go incognito.

The Upcoming Disruption In Online Property

A storm is brewing...

It has now been a full year since I started GoodPlace.my, and if I’m going to summarize my startup experience so far, it’s this – property is a funny business.

It’s possibly the single largest purchase that most Malaysians make in a lifetime, and yet agents are now struggling more than ever to earn their commissions.

Agents come to my office frequently, and I therefore get to hear about the challenges that they face on multiple fronts – the sellers, the buyers, and their competitors.

Property is no longer a “relationship” business. Indeed, building long-term relationships with clients seems to be offer little (short term) reward (if any) compared to hustling for the lucrative one-off transaction. And as such, agents tell me that they feel crowded out by bad hats who would resort to deception and downright fraudulent tactics to close the deal.

I want to help the good guys win. That’s GoodPlace.my’s raison d’être.

Through the DealMatcher (where I match home buyers with agents), I want to create a property buying environment which is anchored in transparency and trust.

So here’s a summary of how the DealMatcher works. First, I would qualify the buyers to ensure that they are serious and genuine. Then, depending on the buyer requirements, I would do some research and share pricing data if I have got them. Finally, at  the buyer’s request, I would make the connection to a suitable agent (which I recruit via GoodLeads.my). And as buyers and agents provide feedback to me directly, I am able to make instant amendments if necessary (read: blacklisting errant buyers and kicking out bad agents).

What makes the DealMatcher platform different is that the information is curated, the buyers sufficiently qualified, and the agents carefully vetted. These are the essential ingredients for successful deals, and when a home buyer gets to buy the property of choice, everybody wins.

The DealMatcher platform is gaining good initial traction

The DealMatcher platform is gaining amazing traction

These are early days, but feedback from home buyers have been encouraging. Do this – click here and scroll all the way to be bottom. Reading these comments make me all warm and fuzzy inside. 🙂

My plans for the DealMatcher are big, hairy… and fairly audacious. The next version of the platform will come with rich, real time listings data as well as an exchange where professionals can share and find co-broking opportunities. Membership of this platform will be restricted to agencies which I will personally vet for quality.

And of course, these ideas are not new.

A few months back I had the opportunity to meet up with Guy Major, the head of residential sales and lettings at Savills, Rahim & Co. (One of Guy’s negotiators, Amanda Andrew, is a long time reader of GoodPlace.my, and I have been providing her with home buyer leads on an irregular basis).

It was Guy who introduced me to Lonres.com, a portal used by property professionals in London to access real time data and find commission sharing opportunities (thanks for the pointer, Guy). Many of the DealMatcher’s features in the development pipeline are modeled after Lonres’ own (albeit with a Malaysian twist to suit the local market).

But the bells and whistles aside, the core of the DealMatcher remains unchanged:- we match good buyers with good agents, and we can only do this with a large dollop of good old-fashioned trust underpinning the platform.

Trusted Curation Is The Future

I am an avid fan of Shark Tank. It’s the only “TV” show that I watch (with religious fervour I might add). Last night, I torrented (yes, I did that) eight episodes and watched them all at one go, until 5 in the morning.

Mark Cuban rocks GoodPlace

In one of the episodes, Mark Cuban (incidentally my favourite Shark) said something which completely resonated with me:

Trusted curation is the future.
Mark Cuban

In this age of mass advertising (spam?), volume seems to be the only metric that matters for the regular Joe Negotiator. Can’t get leads? Why, I’ll double down and post even more ads! Don’t get enough calls from my listings? I’ll post an ad with a fake price which is 10% cheaper than everyone else. I’ll do anything to get the sale… just about anything.

Indeed, given how things work now, it’s one huge Charlie Foxtrot of a race to the bottom of the barrel. But it really doesn’t have to be this way, and I’m going to tell you why (and how) next.

2015: The Year Of Trusted Platforms

I‘ll take the cue from Mr Cuban and apply the “Trusted Curation” model to online property:-

  • Curated listings with original photos, legitimate asking price and other value added data like historical transactions
  • Qualified buyers with complete requirements list, personal profile and record of previous investments
  • Verified agents with feedback ratings, stock information and transaction records
  • Platform to facilitate commission sharing / co-broking opportunities
  • Exchange to act as a leads clearing house between lead providers and agencies (or between agencies)
  • Impartial property reviews database with wiki-like crowdsourcing and public editing facility

 A tall order? Hardly, because as I am writing this, a prototype is already being built by my engineering team on top of the existing DealMatcher platform. The future is nearer than we think, and I am pretty excited about it!

So you’ve read it here first, folks. The property industry is set to be disrupted by “trusted platforms”, and it could happen in Malaysia in as early as 2015. Mark my words. 🙂