Ask any real estate professional whether people buy on emotion (property market opinion) or fact. They delight in telling you that people buy with EMOTION and then later justify this decision with the facts ... well, the facts that suit their 'story'.
It really should be the other way around. Get all the facts and data that support the purchase decision and then get excited (emotion) and transact.
We've all been there.
When it's time to invest, we start asking questions.
We seek property market opinion in the media.
We are easily swayed by what our friends, acquaintances or work colleagues are saying and doing.
We may hold some sentiment for an area we know or have a connection with.
Investing in property they personally LIKE ... rather than setting emotion aside, looking at the facts and making an informed objective decision.
Do you invest based on property market opinion? Sound like you?
The reasons we let our emotions decide for us are as follows:
- We find property market research overwhelming
- We act on biased 'expert' advice from so called experts with slick marketing
- We get stuck with analysis paralysis when we see competing property market opinion, statistics and vast swathes of information
So what do we do?
Well, we ...
- Buy the wrong property
- Buy in the wrong location
- Pay too much
- Buy at the wrong time in the cycle
- Don't sell at the right time
- DO NOTHING AT ALL
Objective property market FACTS trump subjective property market OPINION
I will prove this.
Property investing ... or I should say, successful property investing is not just an art ... it’s also a SCIENCE … and it’s possible to beat the herd and make a success of property investing if you stick to the cold, hard facts - or property market STATS!
Successful investors are inherently lazy!
Yep, some of the best investors I know don’t spend their weekends picking up a paintbrush or knocking down walls to add value to their property investments. They don't spend hours and hours reading competing property market opinion online.
They simply buy property in the right locations … locations where their properties grow in value due to pure market forces - in capital growth suburbs that beat the majority of the rest of the market.
So, what type of investor are you?
PASSIVE ... You jump in feet first with not much market research … lead primarily by gut-feel and you let the 'experts' and their property market opinion run your show.
ACTIVE ... You do your homework to make sure you make the ‘right’ decision.
ANALYTICAL ... You spend months (or years) researching the property market waiting for that ideal location to persuade you it's a good bet.
It’s obvious that being passive or overly analytical can have its pitfalls … but it’s important to be honest with yourself about your strengths and weaknesses, as well as your skills and areas of expertise … what you know or don’t know.
Now put that all to one side as all it really takes to succeed is a passion for property (you’re Aussie, right?) and logical, objective property market research and an understanding of property market data - what it is, where to find it, and how to do both statistical and fundamental research.
It’s not as complicated as it sounds... but nothing rarely is when you know how.
Property strategists, buyer’s agents, property 'spruikers' - and the like - will try and persuade you that choosing the right location is an ART … of course they will; they have a plethora of services to sell you based on their subjective (and designed to be convincing) property market 'opinions'.
Don't get me wrong - experience, industry contacts and many other attributes are a vital ingredient and many of them bring this to the table.
... But MOST don't.
The truth is, armed with a greater understanding of what affects property prices, how to make sense of property market data, and a how to use a capital growth predictor that crunches all the data reliably (so you don't have to), you too can cherry pick the best property investment locations like a pro … and grow your property investment portfolio (and growth) with relative ease.
Choosing where to invest for exceptional capital growth is really easy when you understand the power of supply and demand ... when you learn how to calculate the gap in supply and demand for property suburbs ... and when you stop listening to subjective or, at worst, biased property market opinion.
Article by Michael Fuller