Expert Advice with Todd Hunter. 08/03/2017
Travelling as much as I do means I spend plenty of time in airports. The day I was writing this blog was a huge day - 18+ hours, door to door. Times like this allow a guy to sit and ponder. What am I planning to do this weekend? What's on the other side of a black hole? Will Trump be good or bad for America? And there's always one topic I think lots about, and I've now come to a conclusion. You could say I had a light-bulb moment.
We all love talking about property and property investing in a social environment. I can't remember the last time I was at a barbecue and property investing wasn't a hot topic. That said, I guess being a professional investor and a buyer’s agent apparently gives everyone the green light to ask me what they want to. Yes, you know who you are! A bit like when a doctor is at a party and someone always has a little side chat and says, "Hey Doc, I’ve got this rash, what do you think it is?"
As Australians, why do we talk about property all the time? Basically, because we like it and the topic makes us feel good. But why does it make us feel good? Yeah, we’re about to get deep.
For those who don't know, dopamine is a chemical released in your brain by neurons to send signals to other brain cells. In English, it is a neurotransmitter that helps control the brain's reward and pleasure centre. Some triggers for dopamine release in your brain are sugars and alcohol, and drug addicts also get their high from the dopamine hit. Unknowingly, your body is highly addicted to its effects.
“This could also explain why people get the ‘property bug’”
It's one of the reasons you feel so much better, so quickly, when you have your 3pm sugar fix to get you through your day, and again, when you start to feel relaxed after a few drinks.
So what's this got to do with property? Well, for some time I have been doing a little experiment on human behaviour at social functions and barbecues.
Now, I'm no neurosurgeon (my office is going to love that statement), but when the topic of conversation changes to property investing, everybody seems to relax and their entire demeanour changes. They become very entrenched in the conversation, participate, comment on their beliefs, and tell success stories either about what they have achieved themselves, or what friends of theirs have achieved. And it's what I like to call the ‘Dopamine Effect’.
This could also explain why people get the ‘property bug’ ¬ the thought of making lots of money can become addictive for some. Whether you do actually make money or not, the thought of owning a property portfolio is the trigger to release the dopamine in your brain to make you feel great and motivated.
And maybe this is the reason many investors plunge in deep, very quickly, before doing considerable research themselves on where they're investing or who they're using to help them achieve their dreams. The good feeling from the addiction kicks in and takes over. And this may also explain why some investors feel the ‘lows’ when they fail ¬ the negative effects when their rash, bad decisions become a reality.
I speak with investors regularly who want to buy six properties within six months so they don’t miss the market. My advice is to take it slower; there are always deals out there. Slow and steady wins the race.
Todd Hunter is director, buyer’s agent and location researcher for Sydney-based wHeregroup. He is an active property investor himself and amassed a portfolio of 50 properties by the age of 31. For more of Todd's musings, visit the wHeregroup blog.
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
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