Does being an investor influence your choice of PPOR?

Dave bought this up in a recent thread that kind off went off topic, but I thought it worthy of discussion in a new thread...
Here are his thoughts- comments welcome

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I think investing changes your attitude in terms of looking for value for money in a PPOR also. A PPOR is emotional, but you also realise that it's also a great asset to leverage off and secure future investment and life goals with. You start to balance house dreams with life dreams - if that makes sense.

For example, we looked a bit harder at our options when we bought our current PPOR. We didn't downgrade our house so much as worked out that it was better to knock down an old house and build new rather than build in a new estate three times the distance from the city (if Canberra qualifies as a "city") - for about the same price when including the knock down vs cut and fill costs!

It is amazing how the cost per m2 is often cheaper in existing suburbs closer to town. If we hadn't been investing I don't know if we would have looked for the opportunity and made the decision we did. Perhaps I'm just too obsessed with investing and RE!

It would be interesting to hear if others have found that their investing influenced their choice or location of PPOR, but I think I'm getting off the topic of this thread!

Dave

 

Hmmm, I think Dave may have something here, I know that being an investor has affected our decisions on our renovations - we would not have looked into our options as much or got as many quotes before we started investing. This is probably due to 2 things, mindset and knowledge.

Our mindset pre investing would have been "We cant afford that yet - keep saving!" whereas our mindset is now "hmmm if we do this it will increase the equity in our home which will help us get more investments!" Also we question things more now, when told that "no-one keeps the carcass anymore we just rip it out and put a new one in" we thought bullsh*t and kept looking for a real tradesman!

 

I agree. You can't help but think about value for dollar when you've been investing for a while. Additionally, you feel like negotiating that little bit harder!

 

I think they go hand in hand. If you have an investing mentality this will naturally affect the purchase of any PPOR just as it does for IP's, shares or even discretionary items like toys/do dads.

Once you gain an investing mindset it would be very hard to buy a PPOR that wasn't going to stack up as a good investment, or at least as good an investment as the alternatives. The emotional part will be outweighed by the investment logic.

 

As an investor and Buyers' Agent, I find it difficult to NOT think like an investor when appraising the value of homes for people who are looking for PPOR's. I am able to remain emotionally detached, assessing the property on it's fair market value only and determining the appropriate worth based on my own research. I can only offer an opinion, however, as my clients have the final say as to what they will want to pay. My job is to get that figure lower, naturally, where circumstances and vendors permit
As Rick has pointed out, and I am in agreeance that, once an investor, the mentality of logic and "value for money" takes over in such a way that it affects our decision to purchase quite differently.
Doing our due diligence efficiently also ensures that we know the market to such an extent that we won't overpay based on emotion alone.
It's a sad fact that home buyers still don't take anywhere near enough time or research when purchasing their own homes, tending to still rely on the words of REA's alone.

 

Jaque,

When we were renovating our last home ( which we sold ) everything we did to it was done to try and create an emotional response from a buyer. It worked too.....we did very well out of it. However, knowing what we know now it was a mistake to sell...... or should I say a learning experience.

When we bought our new place in the Northern Rivers we unfortunately fell under the spell of the place too and perhaps were too keen to buy it. We have been busy learning more about investing since then and I believe we would certainly have looked at things differently if we had todays knowledge back then. Our negotiations would have been tougher as well.

Our mindset has been changed and I doubt if we would ever buy as loosely as we did this time around IP or no IP.

No regrets though.

Cheers

Jared

 

Does being an investor influence your choice of PPOR?
Definately. I/we chose our current PPOR based on potential value, suburb, amenities, all the usual pre-requisits. It was an abused house that had been on the market for six months, but is surrounded by million dollar properties. I saw the potential as soon as I walked through the door.
Without an investors mindset I reckon I would have walked away as most people had.