{"id":20405,"date":"2018-02-25T01:00:23","date_gmt":"2018-02-24T14:00:23","guid":{"rendered":"https:\/\/www.realestatetalk.com.au\/?p=20405"},"modified":"2018-02-25T01:00:23","modified_gmt":"2018-02-24T14:00:23","slug":"leave-your-emotions-at-the-front-door-cate-bakos","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/leave-your-emotions-at-the-front-door-cate-bakos\/","title":{"rendered":"Leave your emotions at the front door \u2013 Cate Bakos"},"content":{"rendered":"

One thing that all successful property investors possess is the ability to remove emotion from their decision making process.\u00a0 Cate Bakos<\/strong> says this is a big plus.<\/p>\n

Transcript:<\/h5>\n

Kevin:<\/strong>\u00a0 Buying property is all about, well, I guess it\u2019s a lot about emotion. It\u2019s also, if you\u2019re an investor, you need to look at it as a business, which in some cases, means taking out the emotion of investing. But how much of a trap is it if you do get caught up in that, especially first-time investors, I guess?
\nJoining me to talk about this, Cate Bakos, who is a buyer\u2019s agent out of Melbourne from CateBakos.com.au.
\nGood morning, Cate. Thanks for your time.
\nCate:<\/strong>\u00a0 Good morning, Kevin. It\u2019s lovely to be on the show.
\nKevin:<\/strong>\u00a0 Have you seen that as problem, particularly for first-time investors?
\nCate:<\/strong>\u00a0 Every day. Every time I talk to someone, there\u2019s been usually a little bit of a need to reprogram them at the start if there\u2019s emotion slipping into the picture.
\nKevin:<\/strong>\u00a0 How do they demonstrate that? What do they say to you for the alarm bells to go off?
\nCate:<\/strong>\u00a0 As soon as they start overlaying criteria that\u2019s not financial-related. For example, they might tell me where they want to be or what sort of attributes they want the property to have. I need to ask them whether this is purely an investment decision or if there\u2019s a potential for dual purpose? So, in other words, that difficult project where someone says \u201cI want an investment but I might want to live in it.\u201d
\nFrom there, we really have to work out whether there\u2019s a short-term need for them to live in it and whether it does need to suit them personally in their lifestyle, or whether they\u2019re just hedging their bets, which is what a lot of people do. Whether they\u2019re deliberate about it or whether it\u2019s just in the background, they want to think that there\u2019s some logic and some sense to what\u2019s otherwise an investment.
\nKevin:<\/strong>\u00a0 Yes, they apply those personal standards to it. I guess this also happens a lot with renovators where they try to renovate a property to suit their lifestyle as opposed to what the market should be dictating.
\nCate:<\/strong>\u00a0 Absolutely. You always have to look at what the target buyer or the target tenant will value in a particular area for a particular dwelling type. And as soon as you get that wrong, you can devalue the property or you can make a bad decision or buy a property that will under-perform what you could have targeted if you got it right.
\nKevin:<\/strong>\u00a0 What are some of the things that a buyer or an investor should be looking at to determine the type of property that\u2019s going to appeal in a particular marketplace? What are some of those trends, Cate?
\nCate:<\/strong>\u00a0 The first thing that everyone wants to go for is capital growth, and that should be right up there. But I think the criteria that\u2019s even more important than capital growth is making sure the cash flows will suit you, because if you take on a property that is too cash flow negative for your own budget, you will find that you can\u2019t afford to hold it, so there\u2019s no sense in doing it.
\nWe still want to target something that will deliver capital growth but it needs to deliver the right kind of rent, and we need to make sure that the rental vacancy rate in the area is attractive to an investor. There\u2019s no point going for a dwelling that will be difficult to rent and will have extended vacancy periods.
\nThen the second-last criteria is understanding the target tenant and the demographic in the area and making sure that you\u2019re happy and comfortable with that demographic. And then the final one is taking into account any other property that you have in your portfolio and trying to be a little bit diverse with your decisions so that you\u2019re not planting all of your eggs in one basket.
\nKevin:<\/strong>\u00a0 Is it a mistake for buyers, particularly when they\u2019re working with a buyer\u2019s agent, to become too defined in the type of property they\u2019re looking for? The first couple of standards you gave us there were all about the marketplace, its performance, and the finance. So, if you went armed with those two steps and then worked with a buyer\u2019s agent to help you identify the type of property, Cate?
\nCate:<\/strong>\u00a0 Yes, that\u2019s absolutely right. Once I\u2019ve defined the type of property and the areas that offer that, it does become a bit of a black-and-white approach, and a good buyer\u2019s agent will challenge a buyer that has some firm ideas in their mind that aren\u2019t linked to any financial logic.
\nFor example, if I have someone who\u2019s telling me they want to stick to a particular set of suburbs because it\u2019s close to their home and they know them, I will challenge them on that. And in a lot of cases, that could be the wrong suburb for them.
\nThe same goes for particular elements of a property that they think are appealing to them. There\u2019s no point going through something with a large garden or something with an elaborate dining area if the target tenant doesn\u2019t want to look after a garden or dines out all the time.
\nKevin:<\/strong>\u00a0 When you take on those sort of responsibilities, those large gardens, you actually add a whole new layer of expense to your investment property, as well, Cate, don\u2019t you?
\nCate:<\/strong>\u00a0 Absolutely. That\u2019s so true.
\nKevin:<\/strong>\u00a0 I guess it could be highlighted, if you were to go into a marketplace, say near a university as an example, the style of property that\u2019s going to appeal to a university student is not one that\u2019s going to appeal to a family.
\nCate:<\/strong>\u00a0 Absolutely, and you also have to recognize when you\u2019re going to areas where the families are the dominant tenant type, because if you\u2019re an area that\u2019s just young professionals or couples, then you need to reflect that.
\nKevin:<\/strong>\u00a0 Yes, wonderful stuff. Cate Bakos always makes a lot of sense, a buyer\u2019s agent from Melbourne. Her website is CateBakos.com.au.
\nThanks for your time, Cate.
\nCate:<\/strong>\u00a0 Thank you, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

One thing that all successful property investors possess is the ability to remove emotion from their decision making process.\u00a0 Cate Bakos says this is a big plus. Transcript: Kevin:\u00a0 Buying property is all about, well, I guess it\u2019s a lot about emotion. It\u2019s also, if…<\/p>\n","protected":false},"author":176692471,"featured_media":20406,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[32,10,11,13,36,22,25],"tags":[101],"class_list":["post-20405","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nLeave your emotions at the front door \u2013 Cate Bakos - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/leave-your-emotions-at-the-front-door-cate-bakos\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Leave your emotions at the front door \u2013 Cate Bakos - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"One thing that all successful property investors possess is the ability to remove emotion from their decision making process.\u00a0 Cate Bakos says this is a big plus. 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