Heart Over Head While Buying a Hom

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 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, you’re thinking based on financial gain rather than personal feelings.And at the end of the day, investing is all about the economics, not the emotions.

It’s an old adage but very true. The key aim of most beginning property investors is to build a lucrative property portfolio.However doing so without a plan of attack is like setting out on a road trip without a map…you’ll inevitably take a wrong turn and end up lost!Successful wealth creation through real estate requires you to set goals, determining where you want to end up, and then devising a cohesive plan to get there.

You need to focus on both the short and long term and ensure your investment decisions gel with your overall strategy.Work out what you want to achieve with regard to income – are you chasing short term yields or long term capital growth – and how you can best manage your cash flow as a smart investor.What type of property do you need to buy in order to meet your income goals?With a carefully thought through outline of your investment journey, you will end up exactly where you want to be.So plan your action and then action your plan.