The answer this question may seem obvious, but before answering it, let me go through the property buying process.
Most people confuse buying an investment property with buying their own home. On the surface it may seem like the two are the same: you find a property, inspect it, if it looks nice and you have a good vibe from it then you buy it. Right?
Not really. Let’s look at both.
Buying your own home
When you are buying your home, it is largely an emotional decision. You need to love the place, it has to feel right, it should have all the features you want, and if it is not your dream home it should at least come close to it. Then logic comes into the decision: does the location suit your particular needs? Is it convenient to get to your work or your kids’ school? Does it have sufficient closet space, spacious living area, a nice landscaped court yard, etc.?
Then if you really love the place, you may possibly discount some of the other features, like distance to public transport (because you may never use it anyway), proximity to childcare centre (because your kids may be grown up), etc. So overall the decision is based on your personal preferences, which may not necessarily match preferences of the majority of other people.
In addition, you probably don’t care about the rental return, vacancy rate or property price growth in the area, since you will be living in the place and not planning to sell it any time soon.
Therefore, the main factor in the own home purchase is that you love the place!
When you are buying your home, it is largely an emotional decision. You need to love the place, it has to feel right, it should have all the features you want, and if it is not your dream home it should at least come close to it. Then logic comes into the decision: does the location suit your particular needs? Is it convenient to get to your work or your kids’ school? Does it have sufficient closet space, spacious living area, a nice landscaped court yard, etc.?
Then if you really love the place, you may possibly discount some of the other features, like distance to public transport (because you may never use it anyway), proximity to childcare centre (because your kids may be grown up), etc. So overall the decision is based on your personal preferences, which may not necessarily match preferences of the majority of other people.
In addition, you probably don’t care about the rental return, vacancy rate or property price growth in the area, since you will be living in the place and not planning to sell it any time soon.
Therefore, the main factor in the own home purchase is that you love the place!
Buying an investment property
The process of buying an investment property is very different, so applying the same criteria you will most likely choose the wrong property.
The main difference between the two is the mindset. Buying an investment property is a logical process, not an emotional one. It is very similar to buying a business or any appreciating asset, whose sole purpose is to provide for your future – whether it is your kids’ education, helping them with a deposit on their first tome or your own retirement.
The purchase should be based on a strict set of criteria, and if the property does match it then this is not a good choice. What criteria do you need to satisfy? These include proximity to public transport and major highways, local schools and childcare facilities, local amenities. Other important considerations are the area’s demographics, potential growth, rental return and vacancy rates.
The fact that you may not like living in that particular area or in that particular property are immaterial and should not influence your decision. After all, you will not be living there!
All that matters is that the property ticks all the right boxes and then it is highly likely to be a good investment.
So, the answer to the question is no, you don’t need to love your investment property!
And now you know why.
