Everyone is always over-stating that you dont get emotional about purchasing properties.
Would be interested in what made you buy the property you purchased.
Whenever, wherever.
I believe emotional aspect comes into it regardless, what is your opinion.Hi Marisa,
to me honestly, investing is not an emotional game… its all about figures, and ensuring, that you can make money or a return, on either your cash, equity or what ever sort of deal you pull together.
Cheers,
sisThanks SIS, I am really trying to adopt this philosophy as I am waaaay too emotional when purchasing. Maybe I should be buying SIGHT UNSEEN this may have its downers but if it fits the criteria and I obtain all the appropriate check, building etc. it may help.
I read a book recently by M Lomas and was astounded to read that she actually owns properties which she has never, ever seen. These have met her written criteria, she stated that this was a distinct advantage to property purchase.Hi Marisa,
There will be many out in this forum-land that will disagree with me, advocating that property investing is a business, in which the heart should not play a role.
BUT………for what it’s worth; whenever I am going through a property with the view to purchasing, I always ask myself the same question “would I live in it (here) myself?” if the answer is no; I don’t buy it. I see myself as an extremely fussy (and house-proud) type and if it is not to my liking, then I would imagine the kind of tenants it may attract would be equally so. [hmm]
Okay, all you practical, down-to-earth, “investing is a business” types……give it your best shot; go on, slap my wrists and tell me I’m a bad girl !!!! [whip]
Mummmmmmmy !!!!
Jo
Marisa, I’m with you, M Lomas, SIS, and Dolf de Roos on this one – ‘fall in love with the deal, not the property’.
Sure, if you have two deals exactly the same price and yield and all other things being equal, and you’re trying to pick one, and one is ‘cuter’, then sure, call that the ‘better deal’ if you like, because of the percieved added value and appeal to tenants.
I wouldn’t live in my IPs as ME right now, but I would if I was my tenants.
And I don’t think that makes me any less ‘house-proud’ or ‘fussy’, just less likely to make a bad investment decision because i got sucked in by the pretty paint job, mowed lawns, smell of coffee, open fire, or other seller’s trick to appeal to the average emotional buyer, who sadly doesn’t realise that these are common sellers tricks you can find in any book entitled ‘how to achieve maximum sale price for your property’ or similar.For example, it’s well known that you can add 10K to the price of your property if it’s freshly painted, even if it only cost you 2-3k to paint it. etc. etc. etc.
That’s $7k you just lost in value, by turning up your nose at the house with the peeling paint.
joy to the world
Well, I only let emotion come into it once all other factors have been checked to be OK ie: if the figures work and the area has the services I want and I have say 3 houses that are similar price, with similar rent and are in similar conditions, then I let emotion be the final deciding factor.
Marisa, emotion does come into it for me. When me and my then partner bought our second unit, we looked at it and said “awwww- purple bath!” and bought it
The fact that it was a really good buy helped I LOVE real estate [inlove] If all else stacks up though, I am not sure why emotion would bother you, Marisa. People DO use emotion to purchase things- I wouldn’t buy a white care because I don’t *like* white cars. Aesthetics are important to me, and I would probably have an issue purchasing a place if I didn’t like its appearance. Go figure, I am not a calculator or a spreadsheet. I like the houses I buy- and why not?
The good thing is, there are so many hundreds of thousands of houses to choose from! So you can pick what you want- based upon numbers, emotion, and whatever other criteria you want. If you see a house, and don’t like it, there’s probably another one with the same numbers, that you DO like. I wouldn’t feel too worried about it- we’re emotional creatures.
kay henry
Hi guy’s and gals,
Many years ago I listened to one of those psych’ type people who had an interesting point of view.(can’t remember the name)
He said it was impossible for human beings to make decisions based on logic alone. Rather, we make emotional decisions, and then dredge up whatever logic we can find to back that decision up.
As tough as that was for my youthful male ego to accept at the time. I now believe that to be the absolute truth.
For instance, the decision to invest $+ve or $-ve is probably more to do with psychological factors than logic. The debates on these forums will attest to that….:x
Those who claim pure logic as their only guide….well, those of us who are aware of our emotional side can only smile, and note the evidence of the opposite….
Cheers
Investment should be based on the “numbers” – feasibility.
Too much emotion can lead to mistakes, whether during the decision phase, i.e. selecting a property, the negotiation phase, i.e. getting the best out of the deal, or the resale phase.
But there is another aspect of the emotion factor which is aligned with perceived risk – remaining focused on “feasibility” is a means of overcoming this aspect.
In simple terms, it is how you as the investor perceive the numbers. If you look at the capital being directed into an investment as “cash” or “money” that could be better used elsewhere, would enable you to purchase XYZ, or it is simply “perceived” as “too much money”, then it is likely you will never become independently wealthy.
Every dollar invested should clearly demonstrate a return on that investment when you conduct a feasibility study. Each dollar should be treated as a “number” – not looked at in a monetary sense.
If every “1” returns “1.25” [only an example] then often the amount of money you have to invest can be somewhat irrelevant – the deal is “feasible” – meaning there are ways to finance the deal with creative thinking and persistence.
— Michael
Emotions are often disregarded as feminine, a proof of weakness, illogic, absurd, and in the way of sound business practice.
Yet such concepts are by themself emotional.
Our process of decision-making is based on a big array of values that are stored in our subconscious mind. Many people are totally unaware of the existence of such decision taking values because they themselves did not put them there.
We are constantly subject of the programming of our subconscious by the environment we live in, the type of book we read, the movies we watch, the news, and media in general, our friends and peers, fellow forum writers, all contribute to load our subconscious with the values that will make us say yes or no.
“Don’t be emotional” is a preconceived bias learned from someone else who has repeated it to us and we have adopted. It is an “emotional” response to the person that mad such concept available to us in the first place, and has little to do with logic.
I like the example of Kay who honestly says, we bought the house because it had a purple bath.
Did he actually buy the house only on that “value”? Certainly not. The purple bath has a value that is related to something else of value in Kay’s life, something much more complex. It could be that someone who he admires and would like to emulate had a purple bath, or a number of other factors that relate in logical sequence back to a purple bath. So to say I let my emotion get the best of me and I bough a house because it had a purple bath is not accurate.Yet it pays to know exactly what is that makes us tick and why. Rather than suppressing our extremely valuable acumen by saying only use logic, we should dig in our subconscious and throw out all the junk that has accumulated during years of subconscious programming by a lack and victim mentality media, and perhaps also relatives, friends, peers. A subconscious loaded with the values we want, and have chosen consciously to be there, will lead our decision making in the direction of our target and not in the direction that suits the government of the day, the local newspaper or the local moron at the pub.
Use all your faculties when choosing a deal, and make sure you know what values you are using as parameter.
May God prosper you always.[biggrin]
MarcI would dearly wish I was hard headed and money orientated, but nooo I am mostly emotionaly connected to every thing I do.
Although in saying that , if I see a good buy[biggrin] but hate it[agro2] I ask my advisers to explain to me what I am not seeing…and we talk about the thing I hate , and how I/we could change it to a positive.[happy3]This works for me.[buz2]Originally posted by kay henry:When me and my then partner bought our second unit, we looked at it and said “awwww- purple bath!” and bought it
The fact that it was a really good buy helped
What’s wrong with a purple bath???? [confused] Good on you Kay; I just wish I could find one (new or old)….yeah I know you’re probably thinking I’m nuts to want a purple bath; but it’s my favourite colour!!! [biggrin]Jo
Marc said:
“I like the example of Kay who honestly says, we bought the house because it had a purple bath.
Did he actually buy the house only on that “value”? Certainly not. The purple bath has a value that is related to something else of value in Kay’s life, something much more complex. It could be that someone who he admires and would like to emulate had a purple bath, or a number of other factors that relate in logical sequence back to a purple bath. So to say I let my emotion get the best of me and I bough a house because it had a purple bath is not accurate.”hmmm- interesting analysis there, Marc… bizarre, but interesting. Noone I know has had a purple bath, Dr Freud, but I thought it was cute. Also, I don’t emulate others, I just live my own life. I am an anarchist by politics and nature, so I don’t have heroes, guru’s or mentors- I just see others as a bunch of folks, all with their own ways and desires, and I have mine. I *like* some people more than others, but I don’t try and emulate anyone. Pointless task, in my opinion.
I am not sure I let “emotion get the best of me”, but nor do I deny emotion. I am quite happy to love the places I buy. It may seem like a pathology to some, but it makes me happy
kay henry
I would like to think Cremin and I will buy investment properties through the eyes of a tenant. Mainly because we have been tenants for the last 8 years adn have lived in some absolute holes!
Whether that means it would be emotional or not, I am unsure. I would like to think any place we bought would be nice enough for us to live in. Not a bloody palace, but somewhere clean and things aren’t falling to bits.
Even the tenants have the right to live in a house that is looked after.
cheers.
Steph.Success is 1% inspiration and 99% perspiration.
Kay, here is nothing bizarre about it. It is an elementary example as to how our decision-making works. You do not necessarily know what makes you “like” or “dislike” and makes you say yes or no. Do you think people can tell you why they like hot chilly or fish or cesar salad?
You say you don’t know why you liked a purple bath and that is ok, as long as your likes and dislikes work for you.
As far as not having heroes to emulate, that may be so at your conscious level. Subconsciously you value the image of “not having heroes” or “being an anarchist” such image you borrowed from somewhere, and stored for future reference: “This is how I want to be” kind of thing.Your subconscious has no notion of right nor wrong, it just stores and retrieves, that is why it is so dangerous, so powerful, and so useful.
That is my point. Some people mistrust their emotions, because it led them to bad decisions in the past. Others know that they can trust their so-called emotions because these gut feeling lead them to good decisions.
What is the difference between the two? Simple, the information stored and used for decision making in their subconscious mind is different, one is c**p info, the other is good.
It is much better to understand and fish out all those values stored there, and use them to our benefit rather that suppress them.
May God prosper you always.[biggrin]
MarcWell, thank you Marc… However, I do believe some of us work on a conscious level. You obviously differ on your perspective about that. Nice to see you know more about me than I do myself [hmm]
When I enter a place, I see it not as a series of numbers.. but as a sense of aesthetics which aligns with notions of “value” or whatever… so granite benchtops and vanity- looks good, feels nice, and adds value. Downlights, good quality carpets- the same.
I walk into places and touch things. I am a very visual and feeling person. As my brother says… some people drive along and see real estate potential when they look out the window; and others see trees and the landscape. We’re all different.
kay henry
Hi Kay,
Please tell me you kept the purple bath!!! Seriously, you did didn’t you??? There is nothing wrong with a purple bath, and as I said, if I could find one; I’d buy it. Let me know if you ever decide to get rid of it……..call me!!!!!
Jo
Now there is a lady after my own heart![biggrin] . . . figuratively speaking of course he he
May God prosper you always.[biggrin]
MarcOnly if you own a purple bath Marc [inlove] [lmao]
Jo
P.S. Marc, I notice you went back in and edited your comment, highlighting the “figuratively speaking….” in red. I READ THAT BIT the first time, you didn’t have to emphasise it with colour; I never read more into your comment other than humour!!!
CHILL OUT Marc……..I was clowning with you!!!!Kay, no, don’t give me that much credit please [blush2]
Seriously,… this is not a matter of opinion. It is as hard a fact as describing the cycles of an internal combustion engine. It is not a choice to “work at a conscious level” or not.
Our mind is just built that way, with a conscious and subconscious area.
You can opt for taking control of the part that works in the background (subconscious) or you can ignore it, (what most people do) yet that does not stop it from working, for you, or against your objectives.May God prosper you always.[biggrin]
Marc
The fact that it was a really good buy helped 
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