Buying property is a necessary path in everyone life’s journey. For some people, the very first property purchase must be a home; For some people, they seen it as investment instead of home. Depends on people’s mindset of buying a home.
So, what are the mindset that for those 2 types of people when buying a home? What are the things that they need to be considered when buying a home? Let’s look into it!
1. Critical differences
The reality is, investing in real estate is a vastly different affair to buying a home.
➟ For personal stay
When you buy a home, you look for a property with the accommodation you need, in an area that you want to live in, within your budget. When buying a home, the only opinion that matters about its features, location or accommodation is your own.
➟ For an investment property
Property investment is about finding a property in high demand and short supply that will go up in value substantially over time. The only views that matter when assessing an investment property’s potential, features, location or accommodation is that of the market place, both now and in the future. It’s this balance of market opinion and underlying demand which ultimately determines its investment performance, both in terms of income and capital growth.
The smart investor never allows personal likes and dislikes to cloud their rational investment judgement.
2. Questions you need to ask
So before you start looking at properties, take my purpose test by asking yourself these four questions:
➟ Why am I buying property?
➟ Is my objective financial or personal?
➟ What do I want this property to do for me? How will buying this property affect my financial situation, now and in the future?
If your answers revolve around making financial gain, then buy the property which meets these core investment objectives.
3. What meets the criteria?
So which properties tend to be in high demand, short supply, go up in value and produce a solid income?
Over the investment cycle, demand for property is always highest and most consistent in the inner suburbs of our cities.
Sure, there are spikes in demand and prices in outer suburbs and regional centres from time to time, such as that in those parts of Queensland and WA currently reaping the benefits of the mining boom; but simple logic dictates that demand is greatest and most consistent in our most populous suburbs, particularly in those areas in proximity to amenities such as public and private transport, schools and medical facilities, plentiful and diverse employment, parks and village-like retail strips.
Be wary of properties where there is no scarcity of supply or some unique value. If needs be, an aspiring investor should seek out the help of an independent property investment advisor.
Now you know, buying a home and investment property is different thing. There are so much things that an investor needs to be considered about when buying an investment property. While, buying a home is much more simple but not easier, the things you are always put into your primary concern are your personal living style and area proximity, you’re doesn’t care whether this property can be increased in value over time.
So, these are the main differences between buying a home and investing in property.