Family Home Vs Investment Properties

Family Home Vs Investment Properties
An Editorial By Phil Anderson - Tuesday July 18th

The strategy you take on for obtaining the right property depends entirely on the ultimate goal you have in mind for the purchase. This all begins with the question of whether you’re buying the property to live in, or if you’re looking primarily for some form of financial gain. Let’s see where many people confuse the two, and end up paying the price.

Just as these two outcomes possess completely different goals, the strategies you should use for each are also vastly different. Where most people get these two processes confused is by thinking that all properties and all people are alike, when in actual fact neither is true.

The golden rule of thumb is that your home should be bought with an element of emotion to suit your personal tastes and needs to achieve a feeling of satisfaction and contentment that can only come from being “house proud”. It’s difficult to put a price on this requirement, though eventually you inevitably will when moving through the buying process for a new home.

An investment property on the other hand should be as unemotional a purchase as possible where you let the numbers do the talking. Your personal tastes and requirements lose relevance to statistical data such as vacancy rates, potential rental yield and supply and demand to name just a few.

For example, elements such as living in a two story, colonial inspired home with a swimming pool may be a non-negotiable for you and your family, and that is entirely your prerogative. However these same elements that you see as huge attractions could be detractions for potential tenants, where a swimming pool could be a concern for young children, stairs could be a deterrent for accessibility reasons, and a more contemporary feel may fit a broader section of the market.

For an investment property, the end goal of financial benefit should dictate the decision making process, as opposed to your next home, where the decision making process can be generally governed by the notion of “Is this the dream home for my family and I?”.

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Those who choose to ignore the research side of property investing do so at their own peril. Far too often we hear of motivated investors who have rushed in and been seduced by glossy marketing material, only to find themselves in the unenviable position of holding a poorly yielding property that is very difficult to rent and has little demand, thus hurting their capital growth prospects.

At our next complimentary MEMBERS ONLY live webinar I will be taking a close look into which areas of the country I think are set to become Hot Spots for investment. I’ll also focus on how to locate the right property types in the right locations so that investments actually pay you each week for owning them!

 

 

 

Comments

  1. Andrew Bryce says:

    Enjoying the information.At some stage I would like to take this information into action but not in a position at the moment to do so.

    Thank you and keep the information flowing.

    Regards

    Andrew

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