This episode explores the critical distinction between investment stock and investment grade properties, highlighting the risks associated with properties marketed primarily for their tax advantages and depreciation benefits. Against the backdrop of CoreLogic RP Data's findings that investors are more likely to sell at a loss compared to owner-occupiers, the hosts, Bryce and Ben, delve into the reasons behind this trend, pointing out that properties targeted at investors often suffer from oversupply and lack the emotional appeal that drives owner-occupier demand. More significantly, they critique the common practice of selling properties based on tax perks rather than sound investment fundamentals, advocating instead for a strategy that prioritizes location and owner-occupier appeal. For instance, they suggest focusing on established properties in desirable suburbs where renovations can create depreciation benefits, aligning with the 80-20 principle where 80% of returns come from the location. As the discussion pivots to timing the market, the hosts caution against overpaying for properties in hyper-competitive markets driven by FOMO (fear of missing out), advising investors to remain borderless and seek opportunities in less frenzied markets. The key takeaway is that a property qualifying as an investment does not automatically make it a worthwhile purchase; a deeper understanding of market dynamics and buyer behavior is essential for identifying investment-grade opportunities.
