Todd Polke warns against buying property based on emotion like loving a kitchen or pool, which typically loses money. Instead, use a structured checklist that evaluates each property against macro-economic conditions and whether it will outperform the market.
Now, most people when it comes to actually buying a property, they buy based on emotions. They buy based on what your personal preference might be. And they walk into a property and they go, wow, it's— oh, the kitchen's beautiful. I love that property. Or maybe the pool facility's really nice. Whatever the conversation is, anytime that you are walking into a property and going, oh, I just love that, we should get that because of that, that means you're buying with emotion. And emotions plus investing means you're gonna lose money. Instead, we need to have a due diligence setup, a system setup in the first place where we systematically run a deal through a set of due diligence criteria where we can understand, does this deal fit with the macroeconomic environment? Am I choosing individual deal, whether it be a house or a townhouse or a unit, which is gonna outperform the marketplace because it is actually creating our own economy? And we systematically move a property through a process to decide, is this the right deal for my portfolio or is it not? Make a decision and then get it done.
