When buying a home, about 90% of your purchasing decision will ruled by the heart and only 10% of the decision is based logic and analysis. This is understandable, as your home is where you’ll raise a family and this is where long lasting memories are made.
When it comes to investing however, letting your heart rule your buying decision is a common trap to be avoided at all costs. Allowing your emotions to cloud your judgement means you are more likely to over capitalise on your purchase, rather than negotiating the best possible price and outcome for your investment goals. Beginning property investors should always buy property based on analytical research.
Will it provide the gains and returns you require? It is in 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 these questions, rather than buying a house because you loved the curtains or thought it would make a good holiday retreat, your thinking is based on financial gain rather than personal feelings.
And at the end of the day, investing is all about the economics, not the emotions.
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