How to make a decision on an IP while throwing out emotions

Hi Guys,

Just want some advice regarding making decisions.

I have been looking at quiet a lot of properties for my first IP. It has been more than 2 months. I have attended numerous auctions to attend the concept.

Now that I am ready to bid or to even give out private offer, this is what i am experiencing:

1) I get emotional when I look at houses and think will I buy it if I were living in it?
2) I start looking at the little things that I wont like/or like.
3) I am unable to wear an Property Investor's hat and think in a way investors do and make a decision.
4) I look at houses, I keep thinking there will be better houses that will come
5) I attend inspections then look at new properties (by doing a search on Realestate) and get confused if I should put in an offer for the current house of wait for the new open and check that out because that house looks nice!

Damn, is this normal behavior?

I thought I'd talk to you guys to get some advice.

Thanks

 

In the same order as your points;

Scrap #1, its about the numbers and not about whether you'd live in.

#2 isn't too bad a thing to have an eye for - tenants are human too and like to have all the features. Keep in mind though, if its in a different area and different price bracket to where you live, then the wants/needs might be different.

#3 I think this one is about more clearly identifying your goals/strategy, be confident in what you're doing is moving you towards those. Don't mix goals/strategy up with criteria. Those are 2 different things.

#4 When something matches your criteria, get it. You never know when something will match. There might be another match tomorrow, or might not be another til next year. Jump at opportunities as they become available as you never know what is around the corner.

#5 as per #4. Don't wait, if something matches your criteria - pounce. If there are also other things that might match your criteria then thats ok, keep an eye on them. You never know if someone will say yes or no to to your offer, just have to get out there.

 

Thank you @afterbuddha and @D.T. , this is very topical for me at the moment, I'm in a similar situation. I'm also looking for my first IP and while I haven't had the emotional issues around separating it as an investment, I have been hesitant to move in anticipation of a better deal and not knowing if the numbers will really work in the 'real world' (buy and hold strategy).
About a week ago, I decided that I would set a criteria on the property itself, not so much on price. Then, I would put an offer on every single property that matched that criteria. The mindset shift for me was the decision that every property is a bargain if the price makes it so. (within reason). My logic was if it was $1.00, it would be a bargain, no matter the property, so there's a line somewhere. It meant moving from wondering whether something was a bargain to just making sure it's a quality property that I want, then I will put down an offer that makes it a bargain. If the offer is accepted, great, if not, move on.
Consequently, I'm putting in an offer for an off-market property today, 2 offers on properties from previous inspections and I've got 3 to look at on the weekend.

 

Humans are emotional and indecisive creatures: yes, it's normal! Having a trusted team working for you will help you navigate through and make it a business decision.

 

If you are buying in Melb lots of competition at the moment?

What you will probably find is that it is actually not going to be easy to source properties at the moment, dependent on area/suburb due to demand.

Not trying to be negative but I think this is the reality of this market at the moment. While you are trying to decide which property to buy prices continue to rise.

Only way I keep emotion out of it is when I buy sight unseen, I don't necessarily suggest everyone do this.

Its pretty normal to get emotional about property, same as getting buyers remorse.

 

Firstly Thank you @D.T. @KateAshmor @MTR for replying.

I was begining to thinking this confusion will take over me and i will keep looking and never get anything.

Thank you @D.T. for nutting it out. Everything you said makes true sense and i have to start thinking differently. It should be about numbers and not emotions. I will start putting offers instead of 'looking only' and getting more confused.

The other important point for me is not to mix my goal and strategy. I know i have been doing that!

Hello Shawn, Thanks for sharing your experience. I thought i was the only one going through this confusion. Your idea about submitting offer is great and I am going to do that moving forward.

@MTR What you have said is so true.

Just what i have experienced -

I have being attending auctions to learn in a couple of suburbs. In just two months i have seen the prices go up by $10-$15K!!! This is ridiculous and I am not sure if its sustainable.

Anyways, I was looking everywhere previously and now i have narrowed my search to only two suburbs.

Yes, there is competition. I can see that by the number of people visiting the property. It does make me nervous when i go for an open! hahaha

 

Kate, are you talking about buyers agent?

 

@afterbuddha buying any property can be nerve wracking so it is no wonder you have a lot of questions swirling around your head.

With investing however, it needs to be about the numbers, not emotion and it needs to be about buying a property that fits within your investment strategy.

What you've identified regarding auctions and pricing in Melbourne is absolutely true right now. People are standing on the street and paying ridiculous prices for houses at auction, well over the reserve prices vendors were expecting. For this reason, it can be good to source properties off the market (not advertised). Around 50% of the market is sold off market.

As @KateAshmor said, having professionals around you can help, as they are impartial and help you make a clear business decision.