Head Versus Heart

In Professional help by Jeff OsborneLeave a Comment

When buying a home, about 90% of your purchasing decision will be based on emotion and only 10% on logic.

This is understandable, as your home is where you’ll raise a family.

It’s your sanctuary.

When it comes to investing, however, letting your heart rule your buying decision is a common trap which needs to be avoided at all costs.

Allowing your emotions to cloud your judgment means you are more likely to over-capitalise on your purchase, rather than negotiate the best possible price and outcome for your investment goals.

Beginning property investors should always buy the property based on analytical research.

What are the local demographics?

Will this lead to the capital gains and returns you require?

Is it the best location to attract quality tenants?

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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