Emotions make poor investors

By | February 12, 2016

ONE of the major dilemmas for property investors is where and what to buy.

“It always surprises advisers how many investors are emotional about their purchases,” Bellarine Property managing director Christian Bartley said.

“Many people see their investment properties as an extension of their own home and indulge in the same feelings of pride of ownership.

“They turn down a property with strong rental demand just because they themselves couldn’t live in it.”

According to Mr Bartley, many investors lose out by making heart rather than head decisions about property purchases.

“The strongest demand for both re-sale and rental is usually, by ver any marketplace or location.

“Furthermore the luxury markets economic downturn. Much of the luxury rental accommodation is leased by corporations who, in poorer economic times, can no longer justify the cost of accommodating employees in high rent areas.

“And high income earners are unlikely to commit to large mortgages or rents in a climate of economic uncertainty with the possibility that salaries or jobs could be under revision.”

According to Mr Bartley, median priced properties – those in what you could call the large mass of the market – are not as badly affected and usually give their owners the best long term return.

“If they lose some demand from their usual occupiers because young people move back home or families scale down to smaller or cheaper accommodation they pick up tenants or purchasers who can no longer afford the luxury markets,”

Mr Bartley said.

“Investors should forget the question ‘Could I live in it?’ and instead concentrate on analysing objective investment criteria.”

For further information, contact Christian Bartley on 0410 695 325, email christian@bellarineproperty.com.au or visit bellarineproperty.com.au.