Different Property Investment Strategy
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How did Melbourne's property market start in 2022 after lockdowns?
it's the real estate podcast brought to you by ray white the largest real estate and property group in australasia and welcome to another episode of the real estate podcast we're talking with kate bakos from kate bakos properties in melbourne hey kate welcome to the real estate podcast thank you for having me on the show and how has your year begun for you in melbourne for 2022
Well, it's been an interesting start. We had a really heady finish and that was because we had so many auctions and all of our campaigns were really pushed to the back of the year because of our extended lockdowns. And so we saw a lot of activity, but also the buyer to seller ratio eased a little bit in buyer's favour. But the start of this year is not really reflecting that. We've got good auction volumes, but not crazy volumes like late last year. And buyers have really come back with a lot of enthusiasm. So we've got a lot of inquiry. We've got long queues of buyers going through properties and I think it's going to be another really busy year.
And did you get into the first week of November and have clients of yours say to you, I have got to buy by Christmas time?
I did have a few buyers saying they wanted to buy by Christmas. You can certainly give it a good go, particularly at that time in Melbourne. I always find that November, December is a great time to be out there shopping, especially as you get closer to Christmas and people's attention spans start to diminish. But you've got to then sit through a summer and wait to settle. So that's what I always say to people. You might purchase before Christmas, but you'll probably settle in summer.
And we're going to be having a look at how investment strategy is very different to owner-occupier strategy. And of course, essentially, it depends on what you intend to do with them. If you buy a home or an apartment and intend to live in it, then that's obviously called an owner-occupied property. If you plan to rent it to tenants or flip it, it's considered an investment. So, Kate, explain to our audience the strategy difference and I guess the more nuanced aspects to investment strategies?
It's a great question.
Why do buyers rush to purchase before Christmas and how does settlement timing work?
I love this topic. When you're purchasing a home, you've got to make sure you get your criteria right. And the criteria should definitely be defined by you, not by someone with an investor hat on. While people like to think that the home that they're buying will deliver them really good capital growth, ultimately, it's about longevity and loving your home. So it's a very emotionally driven approach and people really have to tap into what they want. Be prepared to do a little bit of feasibility analysis. So have a look at some recently sold properties and just be really certain that you're circling the right areas with the budget that you've got in mind. And so the investor brief, full of emotion, and sometimes it requires compromise.
Whereas the investment approach, it shouldn't be compromise. It should be all about the numbers. So you know what sort of budget you're working to, you know what sort of performance you want out of the asset, whether it's capital growth or lots of rental return and not so much capital growth or something in between. You also have to take into account the vacancy rates and
What are the fundamental differences between owner‑occupier and investor property strategies?
And what sort of tenants you're getting in the area and what the common tenant tenure periods are. So it's a very numbers driven approach. And as soon as an investor is putting on any kind of emotional hat and looking at the property with stars in their eyes, they're probably starting to make mistakes without even knowing it. So that's the difference between setting your strategy. If it's investment, it can't be emotional. It has to be very pragmatic.
It's an interesting point because analysis and feasibility, when you have something like an investment property, as you say, it's less emotional. But I just wonder, versus the home-occupied type of investment, a lot of the times the analysis and the feasibility is really lacking, isn't it?
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Chapters
5 chapters
1
How did Melbourne's property market start in 2022 after lockdowns?
0:02–2:10
2
Why do buyers rush to purchase before Christmas and how does settlement timing work?
2:10–3:06
3
What are the fundamental differences between owner‑occupier and investor property strategies?
3:06–5:59
4
How should investors use numbers and feasibility rather than emotion when choosing property?
5:59–8:43
5
When should buyers set or stick to a budget and how do you avoid regret?
8:43–9:42
Speakers
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