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Emotional buying kills

Emotional buying kills

From time to time, I have clients tell me they are buying their own home and they need to find something they love. I usually laugh and say to them, “What makes you think that this’ll be your last owner occupied home?” More often I see people move on and with their income/asset progress, get something bigger and better, and then rent out their old home. It’s generally a good idea to just keep a cool head and avoid the trap of buying emotionally. It doesn’t have to be absolutely perfect. Now and then I see people get stuck in a small apartment and realise they can’t recycle their deposit to move into their next buy. (the banks often have requirements for the apartment size and sometimes it is unloanable or LVR is as low as 50%). Or they paid too much for their property and I see again people unable to recycle their deposit for the next property.

Keep a cool head and avoid the trap of buying emotionally.

A tip for considering buying an investment property, think “Am I able to add value?” ” Am I able to recycle the deposit?” e.g. add another bedroom to increase the rent and capital, then recycle the deposit, or buy at a price below the property’s value when the vendors are motivated.