Most investors make emotional mistakes
buying close to where they live, close to where they want to eventually retire, or where they want to holiday - these are emotional not investment or business
decisions.
When buying a home, about 90% of your
purchasing decision will be based on emotion and only 10% on logic, which is
understandable, as your home is where you’ll raise a family.
But when it comes to investing,
however, letting your heart rule your buying decision is a huge ‘no-no’.
Allowing your emotions to cloud your judgement
means you are more likely to over-capitalise on your purchase, rather than
negotiating the best possible price and outcome for your investment goals.
Property investors should always buy
the property based on analytical research, and leave their emotions at the
door.
What are the local demographics like?
Will this lead to the capital gains and returns you require?
Is it the best location to attract
quality tenants who can afford to pay you increasing rent over the years rather
than tenants who are only a week away from being broke?
Will it appeal to the owner-occupier
market that sustains property prices in the long term?
By answering questions like this,
rather than buying a house because you loved the curtains or thought it would
make a good holiday retreat, you’re thinking based on financial gain rather
than personal feelings.
And at the end of the day, investing is
all about economics, demographics, and finance and not emotions.
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property manager.
Join now and the cost
is less than a cup of coffee a week to manage your rental property
RealRenta also has a
free vision, so why not check it out
Jason Gwerder
Wednesday, 8 June 2022