Investing With an Owner Occupier Mindset

When investing in possible it’s important to step into an owner occupier’s mindset to ensure you buy the best type of property and increase your chances of growth.
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Resources Related To This Video

How To Find The Best Properties in a Suburb
Homely
Walk Score

Transcription:

When investing in property in a salvo, often we’d come into that property with an investor’s mindset will hopefully we’re looking at the numbers, are done, the suburb research. We’re trying to approach this logically, but it also really does pay to have an owner occupiers mindset as well. We’re not talking about getting emotional and overpaying for a property here. We’re talking about really understanding what the owner occupiers in an area of want and purchasing a property that’s going to meet those people’s needs so we can get the most growth potential possible. So, Hey, I’m Ryan from on property. I hope people invest in property and achieve financial freedom. And today I have with me the buyer’s agent, Ben Everingham from pumped on property to talk about this having an both an investor’s mindset and an owner occupiers mindset. So Hey ben, thanks for coming on today or having me in your office today.

And we sat off several Korean. I was like almost gone for A. I’ve ended up feeling good man. How are you? Yeah, really good. So we just recorded an episode where we talked about how to find the best properties in a suburb. If you haven’t checked that out yet, please do go on property.com.edu forward slash 5:34 to check that out. But in that episode came up, this idea that we both knew but that we haven’t really talked about, which is this idea that you want to be an investor, you want to do your research, you want to be logical, but when it comes down to really looking at the properties in a suburb, you also want to have an occupant owner occupiers mindset so you know exactly what to buy. So do you want to start by telling people maybe the difference between a, an investor approaching a property versus an owner occupier so people

can see the two? Sure. So as Ryan said, like I think the way to approach a property as an investor is to, like we’ve talked about in previous videos, understand the market. Understand which market you’re going to target, Sydney, Melbourne, Brisbane, etc. Understand what pocket of the market, what suburbs, what type of property within the suburbs, and then, you know, the streets and all of the other stuff we’ve talked about there. So it’s very mUch a logical approach. It’s very much a series of rules for me. Those rules are, um, you know, timing the market, most importantly houses over units, metro over regional, big land size, quiet streets and all those other things that we all know as investors to target. Um, and that’s very much a data driven approach to this stuff. Like obsessively read things and that’s where a lot of like my content comes from when we’re catching up together. But

well, the difference, I think the difference there between that’s the way an investor will approach the market. That’s all numbers driven. It’s all we’re avoiding main roads where we’re finding the right suburb. So whereas an owner occupier in that instance would just be like, okay, well where do I want to live? Um, you know, I close, so I want to live to work and what community do I want to be a part of? So we’re not talking about it in that aspect, in the broad aspect of looking at your market. Leukemia suburbs are not talking about having an owner occupiers mindset there. We’re talking once you get more granular, when you found your right suburb and you’re looking at properties in the suburb, the owner occupier is looking for that.

the enterprise, the consultant for completely different. They’re looking for a quiet street for their kids to live on for a nice big piece of land. They’re looking for the right orientation. They’re looking for the right bedroom sizes and walk in robes and they’re looking for nice open plan living in alfresco’s and so it’s a completely different type of product to then what the investors looking at, which if you’re just focusing on the investment and thinking that the rising tide is going to lift all the boats, well the rising tide always leaves. The owner occupied both for that and it’s important to remember both sides because ultimately we’re buying housing for families and buying houses that will sell for a premium in the future. That will value for a premium in the future and we’ll rent for a premium in the future and that means once you’ve got the numbers right, taking that hat off and finding something that people are going to love living in this functional that actually meets the needs of the people that are going to live in the suburb over the next 30 years.

Yeah, and so a lot of people might not realize this, but the purchases of property in Australia and the majority is done by own occupier, so people are purchasing the home to live in it and as well the people who overpay for properties, the majority of those people are going to be owner occupiers as well because they’re less concerned with the numbers that are less concerned with paying 20, 30, 50 grand extra for a property. If they think that is exactly right for their family, they’re going to live in it for 10, 20 years or whatever it may be, so what’s 50 grand to them? Whereas an investor 50 grands like, well that’s 50 grand granting equity. I’m giving up. That means my cashflow is going to be worse. You know, so most of the people who are going to be buying your property, if you’re selling it in the future, are going to be people who were going to live in it and as well 100 percent of the people that you’re going to read the property going to be people who want to live in it as well. A perfect

example of this is like me, the logical invest the mindset versus my wife. So the last two houses that we bought a we bought to live in ourselves, um, have been completely her decision each time I’ve been like, this is the completely wrong decision that makes no sense in the data. The first time we bought a piece of land and we built, I’m literally two months after we completed construction now, neither saudis house for 250 grand more than we paid to actually create as. So I was like, thanks, bye. You can find the next one I thought at the time will paying market or above market values. the second example, which was after we had finally built this home that we wanted to live in for the next 20 years, well, we lived in it for a year and my wife’s like, this isn’t quite it. Yeah,

like you guyS are going to be in again. I’m like, absolutely no chance. Oh well, I’ve put some video ad on instagram without even telling me that when moving and she’s found that dream home. I called ben out the same day. I like to. I heard you like

looking to buy a new hundred. Congratulations. He’s like, what are you talking about? He didn’t even know about it. He’s like, nah, tell lisa she’s driving. I’m like, yeah, you say that, but then you’re going to call me on monday and say we bought a house and I think it was like friday the next week that we bought it, so it knows me better than I,

but she’s found this home. I’ve looked at the sales history data and gone logic logic. Logic eats $100,000 more than it should be priced at. That’s without a doubt like what the market was telling me at the time. We paid 100 grand more than what I would’ve paid for it as market value as an investor moved into the home. It is the most incredible home that I’ve ever lived in. It is perfect for our family and since we bought it because we set a new record for the suburb for that type of product. Everybody else is thought their property is worth more and ours has been revalued for 200 grand more than what I thought it was worth. Now many we’ve made 100 k in six months. We find it so sometimes looking at things from that perspective because lisa really gets that enables, you know, both sides of the coins to be considered.

So what we’re saying here is don’t be the owner occupy out where you will overpay for a property, but think, think lacan and occupier. So go into a property and think what will an owner occupier want? What is someone going to spend more money on? And you can do that. It depends on your situation. Like if the majority of the area young families and you’re a young family, that makes it really easy for you because you can just go in and pretend you’re actually going to live there. Like, would I live in this street? Would I like this property? What’s the aspect like? Or alternatively if you’re not, maybe your kids have moved out of home. You live by yourself or you’re a young invesTor or something like that. If you get on census and you look at the demographics of the area, so you look at what kind of families are made up of that area, what kind of properties people, majority of lee want to live in.

How long do they actually live in these properties for? And that’s like the logical side of owner occupied buying. But the touchy feely side is just simply like, are the streets grain? Uh, the other rides physically wide, like are the streets quite, you say greenfield space, is there access to transport? Is there access to work and employment? And then with inside the property, you know, nice big bedrooms, walk in robes like we talked about, like those little things to create functional spaces for families to enjoy their time in and families think go into because the family size in Australia is changing. It’s now two point six children moving towards three children again as those. Yeah, like the demographics have completely shifted again to kids anymore. It was one point eight for awhile and then it went to like two point two or two. We’re pushing it out.

We both have three children and pushing the number of. Yeah, we’re slot in the averages up and everyone coming in from overseas, so obviously wants to have more kids as well, which is 400,000 people in the last year tightening. So these families traditionally have four or five kids and it’s just completely normal. So got to remember that just because things are sliding backwards for a while, things can change again. And you’ve got to build accommodation that families can grow into a yes, they might start in as like brian and I have as you know, us and our wives. But then you know, both our three children now, and it’s nice to be in a home that you can grow with pto because in a lot of these owner occupied suburbs, the people on average live there where you can see incentives for somewhere between 11 and 15 years and that is a long time for someone to grow with your property. Yeah.

And so you want to be looking for these properties that are perfect for the families that are going to be living in the area because then if the area goes up in value and ideally if you’ve done your suburb research and chosen a good area, it should. What’s going to happen is you’re going to have disparity between the best properties or the Most appropriate properties for people who want to live in that suburb versus the ones that aren’t quite as good. So let’s say we’re in a suburb that tends to have larger families. People want nice, renovated four bedroom homes. That’s what they want. You purchased that versus an unrenovated three bedroom home. Then over time, the value of that property’s going to go up more than the value of the property that people don’t want

and some indicators because we are investors. There are some indicators that are more sort of touchy feely, qualitative stuff. I think homely.com.eu as a really good resource to sort of understand what families think about an area and so what that side is is a, let’s say the suburb is paddington in sydney. You’ll get heaps of renters and heaps of owner occupiers in that suburb. Jumping on and writing the suburb out of zero to 10 stars and then putting in their feedback on it and you’ll get people saying they love it for these reasons or they hate it for these reasons and there’s a bunch of boxes they can take like good open field space, good access to transport, et cetera. And as an investor looking to have an owner occupied 10 on the way that you’re saying things. It can be a really nice soft way of understanding a market because the agents never going to tell you what you actually need to know and we can’t always drive through the suburbs as much as we’d like to. Sometimes when we drive through the suburbs, we see them with rosy colored glasses, not what they actually are. So it can be a really nice way. Um, I think walk score, which you can just google for free, like walk score plus paddington for example, into google is also another really good way of understanding what it’s like to live there. Generally the higher the walk score out of 100 percent the better because that means again, it’s accessible for families to live in and renting and you know, etc. Yeah.

And so this video, I guess we can give you less granular steps on here’s exactly what to look for in terms of like room size or in terms of layout or things like that because it’s, it can be quite intuitive to go into a space and to look at it and recognize whether or not it’s going to be good for our family. But just keeping that in your mind, it’s. It is about the numbers. As an investor, you don’t want to overpay for a property. You want to make sure that it’s going to rent for what you want to rent for. like that stuff’s also important as well as all the other research stuff we talked about, avoiding the red flags, et cetera. This is kind of like that next step of saying, okay, is this property going to be suitable for a family? Is this property going to be extremely desirable for owner occupiers in the future? Whether that be renting to people, because if it’s really desirable, you’re not going to have many vacancies as well as when it comes time to selling that property or getting that property valued. If you have a highly desirable property in the suburb, everyone in that suburb wants to live in your type of property than the chance of getting a high evaluation or higher sell price. You have a higher chance of that.

Yeah, and another indicator for owner occupier appeal that I follow is the percentage of renters incentives versus the percentage of owner occupiers to find a. Somebody with a really strong owner occupier appeal, you probably looking at somewhere between 20 and 30 percent renters, meaning somewhere between 80 and you know, 70 and 80 percent, I’m owner occupiers and if that average annual occupier lives there for 11 years and that earth also earning good money and they’re in that family stage of life when they’re settled, there’s a good chance that people are going to invest in that suburb. I’m sorry, invest in their own homes, improve the qUality of their homes and bring the overall standard of the suburb up. So when you’re driving around suburbs you can see the owner occupied suburbs because there’s renovations, there’s knockdown rebuilds, there’s like a bit of a sense that things are slowly and gradually improving that and that can be like a soft way of feeling it.

Like bedroom sizes. I do have a rule like because I’m such a one or a zero personality type, I just have lots of rules with everything. So what is your role? my role is three meters by three minutes. Absolute minimum for every bedroom, for the, for bedrooms, two, three and four. For the master bedroom. You’re really in an ideal world, want it to be at least four by four, but 99 percent of homes in Australia aren’t built that way in that thoughtfully. So some of this room that we’re in right now, this is a probably two point eight by three meter room. So you break the rule because we’re on a 12 megawatt block as well. You know, I built this house three years ago when I didn’t lucky just constantly learning. I’ll just leave me alone man. Um, but yeah, so investing

in thinking about an occupier as well as ben was saying, looking at those clusters of where there’s more owner occupiers because if you, I thinking like an investor, you might not think about that, but if you’re in an occupied like does this straight feel nice other neighbors living here going to improve their property? Or are these going to deteriorate over time because people are renting and as renters it’s not that because Iran, it’s not that you don’t want to improve the property is that you know, you’re not allowed to do it. And so you had to get permission to do it. They could kick you out at any time really once your lease is up, so it’s like, well, is it worth spending the money to do it? And so there’s all these issues that mean that renters can’t improve a property, whereas people who own that property in your street, they can do whatever they want.

They can paint their house whenever they want, putting whatever plants they want. They can make those improvements, which can tend to bring up the street appeal of the entire street, which will help your property as well. I think in that previous video we talked about the southern map. I’m not going to go over it again now, but generally that premium cluster of properties in house sales, you’ll find it also the higher owner occupied areas in a suburb to say, you know, well, I said there’s no like hard indicators as well. Logically walking through this video, there’s quite a few. It’s kind of like, okay, we can approach from a numbers and data point to think like owner occupiers by. Yeah. Looking at the high density of owner occupiers by avoiding public housing by yeah and lucky. It’s a free way of spots in this other things and you know, that’s, that’s interesting.

I’ve never thought about it that way, but that’s what we’re unconsciously doing because I suppose I found data sets to match the way that I think about property. You know, I just thought that are all invested in assets, but they’re not. Yeah. Well I think this goes. This will give you a framework for why it’s important to think like an owner occupier and then if you want the steps that we’ve talked about where you can narrow down that sort of stuff that’s on property dotcom dudley who four slash 5:34, which is the last episode that we recorded it. So I think that’s probably covered it as anything you want to say to wrap it up. No, I think that’s when it comes to investing in property, you want to think like an investor and do all your research, make sure you don’t overpay for a property.

But yeah, you just want to have that mindset of what sort of people are going to want to live in this property and what sort of people are going to want to buy my property in the future so that you can buy the right property for that market. so that’s what we mean when we say that you should have an owner occupier mindset is that you should really try and understand who’s going to live in your property and who’s going to want to buy your property and what the market wants. Because we’re trying to appeal to the market. And I guess just quickly to say that you don’t necessarily have to buy what’s perfect for that suburb right now. Like we talked about the renovated four bedroom versus the unrenovated three bedroom because you could buy that and renovated three bedroom. But because you’ve invested like it and you’ve got that and an occupier mindset, you know that there’s opportunity there.

And so you could renovate that three bedroom, add an extra bedroom, and then all of a sudden turn it into what the market wants. Because you thought about owner occupiers first and then you found a product or a property that has the opportunity to give people what they want, which I love what you’re saying there because as an active investor, you always want a way to make some money that the market isn’t dictating for you either to do it immediately upfront and get your deposit back or some equity to go again, or to flip the property in some instances or to just manufacture value to that property for the long term for yourself. Yeah, so we hope that it’s helped you guys out today, something new that you can take into your property research and finding the Best property to invest in. Before you do this stuff.

You’ve obviously got to do. You’ve got to know your strategy. You’ve got to have done your suburb, research and all of that sort of stuff. If you’re looking to invest in the market place in the near future, but you’re not quite sure on your strategy or what sort of market you want to go after and you want to talk to someone and get a bit of help to get clear on that. Then ben and the team over here at pumped on property, a offering free strategy sessions where you can sit down, you can talk about your situation, you can talk about where you’re at, where you want to be fInancially and logically as and you can help get those next steps, so if that’s you and you’re ready to invest, but you want a bit of help getting clear on how to invest and where to invest, then head over to on-property dotcom donahue for sash session. You can read more about that free strategy session over there and you can book a time that suits you. Again, that’s on property.com, forward slash session, and if you haven’t checked it out already, please check out our last episode that we did on finding the best properties in a suburb. I’ll leave the links of that in the description down below. Also, don’t forget to subscribe to the channel and until next time, stay positive.

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