EP. 6 | How Owner Occupiers Can Help You in Your Investment Strategy

Parag Dixit

Hi guys, how are you evening? Good Parag, going well, going well, going really well. How's everything

Mudit

going well, yeah, it's it's been, yeah, it's been a good week. Lots of stuff happened, lots of things happening in the market.

Parag Dixit

I know. Yeah, it's such a changing market. I can't believe about a month ago we were talking we'll have three rate cards, four rate cards in 26 and whatnot. And now we are talking of two rate rises, one rate rise. And yeah, it's going to Feb, it will rise, or maybe in some other month it will rise. So it's such a varying market. It's an amazing thing. It's so surprising how the markets change so fast. It's it's going to be a very, very different 2026 for all of us, right? And it's going to be a brilliant time for all of us,

Julius

precisely, yeah. And then we could sense that now. So what I could say is, December, yeah, but phone is pretty busy. Have some keep on getting a lot of calls, so people are getting ready for the next purchases before the bank changes the policies.

Parag Dixit

Yeah, lots, lots and lots of changes coming up in 26 I think there's this April guidelines, which kick in from first of February, so that should bring in some kind of a change. There's an interest rate rise looming around and surprise and Feds cut rate this week in the US, but they are they're not sure about next year. Unemployment, I don't know where it's going to go in inflation, it's going on a different trajectory. So this is a lot going to happen in 2026 and I believe that there will be, there will be a bit of a strain on investors, bit of a strain on owner occupiers, but there will be a lot of value buying and lot of value opportunities, which will be available to people, and there may be chances that we are looking at, be looking at some, some great opportunities, where we may also be looking at misses in the market. So it will be very interesting how people pick and choose what they want to invest in, how they are able to really identify where should I go, and that's where the opportunity lies. And how do I I don't think so there'll be those Gangbuster return suburbs, or maybe states coming in suddenly in the next year.

Mudit

Absolutely right. So I think there are, last few years, there have been different cities, different suburbs, which suddenly came and gave windfall gains to investors. It may not happen at the same pace the way the things are moving, like you're saying right now. So 2026, could be little different, especially because of the APRA guidelines and the interest rate changes that we're expecting.

Parag Dixit

So it the windfall gains.

Mudit

Yeah, it's a little doubtful. I think that is where it also becomes more important that how to think, and what do you do so that you still beat the market, and because it's not gonna be that you pick any property anywhere, and it's gonna just increase in value. So it becomes even more important, what thought process needs to be there. How do you change your mindset so that you invest but you get better than what generally, on an average people would be getting so that your mindset,

Parag Dixit

yeah, investor mindset, yeah, that's that's a fair play. And I think that's what we would love to talk today about investor mindsets. And what can be your investor mindset in 2026 what's what is up for an average investor to look at? Do we continue the same way? Do we? Do we keep on doing what we were doing in 25 in 24 in 2322 or do we do something different? And is that investor mindset? And is that owner occupied mindset different? Or there are, there are mixes. Can we just bring them together? And does that give value to people? All that's going to

Julius

come in? Right? Precisely, yes. So when we look at only for the investor mindset, precisely when you look at suburb, and when you analyze the suburb with lot of data sets, so we just look at, okay, financials are matching, you still have a lot of demand and supply gap and the nature and put to that suburb and get into the property, yeah, but when you look at the fundamental purchases, then it's much beyond what you look at from the investor's mindset. So fundamental purchases means we look at, okay, what kind of suburb is that? What is the population type, how the schools there, then basically, what kind of socio economic changes are happening into that particular suburb, and then brings the entire attention about within that population? Yes, that suburb is good now, but when you want to exit from that suburb in next 10 years, next 15 years, whether you will have an owner occupied appeal for that suburb, yeah, so that's

Parag Dixit

a good point, right? So we're talking, we're talking of investing with an end in mind. Okay, I am going to go into a suburb. I know I'm going to exit out of that suburb in 510, 1520, years. So when I exit, how do I find value? So as an okay, so maybe I should, I should put it like this, as an investor, what do I look at? Right? I look at maybe wealth creation. I want to grow my wealth. I want to have my property if I bought it for, say, $500,000 today, I want it to go up till, say, 700 800 900,000 or whatever. So I know that there is a wealth creation which happens there. There's a mortgage which has been paid down by my renter, who's tenant, who stayed there. So all that happens so I grow my wealth in it. I'm also looking at a good amount of capital growth as a consequence of wealth growth. So I will have that capital growth and that gives me wealth. I am looking at cash flow. Cash flow is critical for me, because I want to afford that property. It should be a sustainable property for all these years. I am looking at all this. I am looking at getting a leverage out of it. I'm looking at getting equity to buy more properties, or I'm looking at getting equity to buy maybe go on a holiday, or I'm looking at equity to do things which I want to do. So I'm looking at all of these parameters as an investor. So when I'm talking of being an investor with an end in mind, so I am saying, Okay, I want to be an investor, but I also want to be an intelligent investor, exactly who doesn't just buy a cookie cutter investment property. I don't buy anything which is just fitting the math. So you know, Okay, this looks good, and I just buy it. I also look at, okay, what would I get extra when I do this, yeah, and if, yeah, yeah, no, absolutely right.

Mudit

So I think when you invest, but you start thinking with a mindset of owner occupier, that how is the appeal for this property for somebody who wants to live in the moment you build that perspective into it, yeah, it. It just makes your investment more robust, less risky, and the probability of you getting better growth than an average investment becomes much higher, because now you're thinking like, if somebody wants to live in this property, how would that person, what are the preferences of that person? How would that person or that family make a decision to live in this versus another property of a choice? So that perspective helps you buy a better property, because that gives you a better chance of exit wherever you want to exit. But, but do you

Parag Dixit

really think I see a lot of times we we do meet clients all the time. So when you're meeting people all the time, or you meet friends over barbecue, or you meet people over this thing, do you really think that I need to have some kind of a mindset? Then an investment is an investment, right? If it's giving me returns, so be it, it gives me returns, correct? But what? What does? What? What do you think a mindset brings to me?

Julius

Yeah, it's all about mindset. Because, for an example, if I'm an investor, I'm looking for X number of properties I'll give you with the example, with the recent purchases, and then whatever we had done in past. And then I could say, okay, in 2021 22 when we had started purchasing in Perth or Adelaide two, kind of suburb which we were witnessing. So they were suburb which were extremely too popular within the investors, yeah. And that suburb which had owner occupied appeal. We started purchasing those properties in between four founded to mid four hundreds. If you look at now, see every suburb grew because from last five years, the entire market was pretty dynamic. It grew well. But when I look back and see the property prices difference between those suburbs which are purely popular within the investors, and then when the investor was just looking at the investor mindset versus those who bought properties in suburbs where the suburbs had an order occupy appeal. So the difference of the prices are very close to 150 $1,000 on an average. Okay, that means you did a similar purchases at the similar time, yeah, at a similar price guide, but once above outperform other,

Parag Dixit

because I will why will two suburbs have a difference in outperforming others? Right? If it's, if it's, let's say if it's in the same postcode. Does it matter?

Julius

It does matter the sometime, it depends on where you buy and when you look at the suburbs, average price, for an example, two different suburbs versus the same suburb, if you look at the two different suburb in a similar Council, then, for an example, if you look at the black town direction as a council, is an example, yeah, your ponds versus your black town, Yeah,

Parag Dixit

same Council, yeah, two different subs,

Unknown Speaker

two different suburb. So going

Parag Dixit

at a different pace, exactly.

Julius

So in black town, yes, you see older houses, type of properties are different. Type of population is different. Type of schools are different, versus when you look at the ponds, type of population is different. The affordability index within the population is different. Affluency is bit different. So five, seven years ago or 10 years ago, when you look at the prices between those two suburbs were similar. There is difference of around 50, $60,000 if you look back now, then probably the difference is around 400 $500,000 so it just not about the investment perspective, because ponds is very famous within the owner occupier also, yeah. So those were invested in ponds. During that time, versus those who invested in black town, they got out performance.

Parag Dixit

Okay, so look, let me ask this. Okay, so now these are two different suburbs. We understand. Okay, this is suburb a, there is a suburb B, and I found a house in suburb A, and I found a house in suburb B and in suburb A, and both of them are, let's say, similar prices, but I've understood that this suburb has more owner occupier appeal. So I am so I'm thinking that because there's a good owner occupier appeal. So if I'm going to invest here, I will, I will do good. But then in that same suburb, let's say we taken the example of ponds in Sydney, right? So we've taken this example. So in ponds, if I'm saying there is an average growth of that suburb at 5% that entire suburb is not going to grow at 5% equally, right? So there will be a difference in growth Exactly.

Julius

So within the same suburb, there could be two different prices. So because within a suburb, you have pockets within the suburb, right few pockets within the suburb extremely popular, where the houses are better, you could see the landscape. The entire landscape of the entire streets are different, where the characteristics of the houses are bit different, where there are few houses in the similar suburb, where they're facing towards the main road, yeah, then the there will be at least 100, $200,000 difference in the property prices.

Mudit

Or they could be, it could be the location, also that one of them is closer to the some houses are closer to the, let's say the transport hub, and say there's a train station or versus something it's which is farther. I think, Parag to your point, absolutely right. I think that's the right way to look at it, that if a suburb grows at 5% that average is an average number, which means that means some properties would have gone up by 3% some would have gone up by 7% so the whole idea of when you start thinking with the lens as an owner occupier, can you identify those properties that instead of going at an average rate, but you identify properties which are likely to grow at a 7% rather than 3% in the same suburb. So this same comparison can be done at a suburb level or at a larger which city to use, or two different suburbs within a city or property within the same suburb, but with a different kind of appeal which is going to so how do you identify I think the core question is that, how do you identify this 7% versus and not buy Something which was probably going to go at 3% although both are in the same suburb, and that's where this, if you just go as an investor and you say, Okay, this suburb, everything is fine. Generally, 5% then you may not be able to identify, but the moment you put that lens on that, okay, if somebody were to live there and buy as in a long term to live then, is this appealing versus that is appealing? All right.

Parag Dixit

So, so, okay, we've taken this example so, and I remember there was this suburb in Victoria point, cook milwan. So I think one part of that, which is the school catchment, was extremely popular, and there was another part of that same suburb, which is not so popular, and they had a vast difference in prices between them, and that's just because an owner of the buyer would think that I, I want me. I want to live in this pocket where I can my child can go to that school, so I'm willing to pay extra money for it. So if I were to be an early investor, and I invest in that area and or I've just, I've have affordability, and I invest in that area, my chances of a capital growth, or my chances of doing better in the longer run, with the exit in mind, are better in that suburb versus in in this and that, that becomes A positive way of looking at things, rather than a positive way of investing in a in a suburb, rather than being on the maybe on just, just investing anywhere,

Mudit

right, absolutely correct. So of course, when you're looking comparing properties like that, there is going to be a Delta difference in the price itself. But then what we're saying is, depending on the budget, depending on what affordability is, when you're comparing, there will always be trade offs when you are looking at properties. So the growth, because if you looking from the lens of an owner occupier, then you start thinking, then there will be higher chances of more demand for this property, good time, bad times. But there will be people who will be trying to look at this property from a buying perspective, and then when that demand is there, when you when the chance of that demand is higher, then you're not going to lose out, so

Parag Dixit

you will make it more so Okay, I am, so I'm I'm an investor. I want to buy an investment property, and now I am putting on not only my investment hat. Okay, I have my investment hat on. I am looking at my maths, I'm looking at my cash flow, I'm looking at my capital growth. I'm understanding that I am doing my trade offs between capital growth and cash flow, and all that bit I've done now I am saying, Okay, how do I identify a few between few properties, or this pocket, or that pocket, or this area, that area? So I'm saying in the same suburb, if I'm able. To pick out properties which are closer to a school, closer to the transport hub, closer to maybe the shopping areas. That's better. That will always give me a much better result versus in the same suburb, but that's a bit further away, and then I have to walk to the train station for about 15 minutes. I may not that property price may not go so well as well, right? Yeah, precisely.

Julius

So when you look for a suburb, when you do research, right? Yeah, for an example, if a x number of budget, like your budget is seven, 800 $900,000 yeah, when you're researching, just don't look at the media hypes and just look at the suburb. When you are looking at the suburb, look at all the fundamentals data as well, yeah, and when you have finalized the suburb, then look for the pockets within the suburb where you can have those owner occupiers appeals as well. That means the type of suburbs which you're selecting, yeah, and when you come up coming towards the property, then if that suburb has an opportunity to become an choice above the owner occupiers, then chances of getting the outperformance in the property is much higher than you go to the different pocket of that suburb. So those amenities

Parag Dixit

is very important. Do asset types also so if you have a different asset type, let's say a townhouse versus a house in the in a different suburb. So does that also change things?

Julius

Yes. So it depends on where you invest and in what market cycle timing you are. So I can give you my examples. I bought a property in 2000 in 18, end of 18, at budget of around $800,000 and I was researching about where to invest. I got an option to buy townhouses in ponley in Sydney, yeah. And then at around $800,000 I was getting quit property in Mount rate for around 740, 3007 43 $45,000 yeah. I opted tonli Because of all these parameters. Yeah. If you look at now, the current valuations for the thonly properties is around 1.9 ish boundaries is sitting at very close to 1.1 1.2 so when you're looking at those type of comparison, all right, then basically we need to look at what kind of suburb you're investing it versus what are the appeals in that suburb. So it's just not about the data. It's about Yeah, basically, where the owner occupies, the interest rate, what is the socio economy of that suburb? Yeah. And then I've got out performance in my own examples,

Parag Dixit

yeah, yeah, yeah. All right, no, that's, that's a, that's a very good take. So you're saying, even though, and it's not bad, townhouses are not bad. But if you bought a townhouse in a suburb, which is a choice suburb, versus even if you bought a house, a bigger house, or a different type of house, a good asset house, but if it's not in a choice above, you are likely to win in buying the townhouse in that choice area, because when you're looking at it with an owner occupied lens, you can understand that I am growing to have a much better growth when I go there, because that's where an owner occupier will come when I want to exit. And they will have an emotional purchase, and they will have the cool because they look at various factors, and they will say, Okay, this is where I want to be, and this is where I want to go in, right?

Mudit

Parag, that's such an important point, because in general, we hear a lot from a lot of people that the growth and chances of growth are higher in fully detached houses versus compared to startup properties. That's generally very common. And a lot of people, a lot of people, professionals, everybody talk about it, and people have seen that. So that is, that is there. And that's why it becomes important to understand that it is in general, okay, but is it blanket? Okay? Is is that the only parameter that you should be looking at? That's where it changes things. And like Julius, your example is bang on. Point that the choice of the suburb itself, because of owner occupier appeal, can be a parameter which overpowers the type of property. So even a startup property in a choice suburb outperform, can outperform. So these are different angles to look at the same thing. You can't just say and make a blanket rule, okay, from now on, I'm going to invest only in houses and not in any kind of other properties that

Parag Dixit

may not with the right strategy, so that we're bringing a mix into investment of looking at it with different eye as well. So taking the secondary eye as well into this, and that's that's, I've seen that as well. So in fact, when you're talking of securities, when you're talking of assets, I've seen people who are investing in those you know, those the same cookie cutter in apartments in anywhere and versus I have we. I know a friend of mine who's just purchased an apartment which has a phenomenal view of the of for the beach in front of him, so phenomenal view of the water. And that apartment is, oh, my God, we could give anything for buying that kind of property. So that's where the value can rise just by having an asset which has which which an owner occupier can look at it and say, I want to live there.

Mudit

Absolutely right? I think you you use this term a couple of times already, the emotional appeal, right? So there is always a premium. Which is attached to the emotional appeal. And if you are a good investor, you would want to cash in on that as well. Yeah, and that's what brings this mindset, thinking of a property from that lens brings in the emotional and people will pay a premium

Parag Dixit

for that. And there, and there are those and these. This is interesting, because this brings to us very clearly that when I'm going to look at an investment, maths is one bit, but that right mindset is very important. And to and for getting a right mindset, I need to have the frame of mind. I need to have an input and a knowledge which comes in through me, through to do. What do I need to do? But the bit is that if my mindset is not right, I may get into an investment which gives me a bit of a return, but then I'll miss out on a larger opportunity of getting above market returns right from the

Julius

same Yeah, exactly. So I would give an example for this, for this one. So for an example, if you have $900,000 to spend, people often talk about per spend, but that $900,000 can be invested somewhere else, and you can make great money out of it. So for an example, 900,000 is spent in Ipswich, and you buy a property where the social economy is extremely poor. You buy property where the renters are more than 55% you buy a property where the affordability is at the doors. But if you're investing the $900,000 in Canning will in Perth, then debt suburb has all the potential which are required, like owner occupied appeal, debt suburb. So social economy is 10 out of 10. Debt suburbs, affordability is still below 25 years every owner occupy is dying to get into the canning wheel. So that means if I have a $900,000 to spend, rather than just attached to one state because of, because I would just want to get in there. Just look at the suburb in another state which has that appeal. Yeah. So when you're looking at on an investment, then, if you're only looking at investors had, okay, Brisbane is doing good. That's what I have to get into the Brisbane and buy a property, rather than that. If I add that emotional value of, okay, I'll pick up another state, but canning, well, has all the appeals of the owner occupier. Then, then chances of getting that out performance is higher than buying a property

Parag Dixit

in Ipswich. So that's, that's data analytics for you. So that's, that's one, that's a good point. So that's one characteristics which I can pick up if I want to have the right mindset that I am getting into, I'm just not getting into any investment which comes to me in front of me says, Okay, you will get a 5% return, and you will get this and this and this. But I'm saying, Okay, I'll add more data analytics into it. I'll more get more analysis into it. I'll read more into what's changing there. How? You know, population, demand, supply. You know, socio economic areas, and employment, employment, what all kind of people live there. So all that bit I bring into the mix, and then choose what I want, absolutely right?

Mudit

And I think, like Julius, like you said, the percentage of rental, rental, right? So there are some data points which are easy to get, and there's a lot of data which is available. So which are the other data sets, like renter percentage is one. What are the and of course, I can look at what kind of projects there are coming. What kind of transportation is that area coming? These are important factors. What are the other parameters, which become a little more important to look at that whether this area is going to have higher owner occupier appeal going forward, it is more

Julius

towards these socio economic changes. Higher. The SIFA index for the suburb means it the SIFA index has multiple parameters. It just not a single index. So it it calculates the income. It calculates what kind of population is moving there. It calculates basically what kind of schoolings are there, about the ranks of the schools. Higher. The socio economic means basically it's more towards the good affluent people. So if the socio economic conditions are changing, or if that suburbs socioeconomic is much better, with the incomes are much higher, affordability is better. And then in affordability side, when you look at the buying and renting, both the affordability is like if you have a buying affordability, and even though, if you have good demand and supply gap with good social economy, then yes, because of that buying affordability, more number of owner occupiers will attract to that area, and they'll have a good price growth. Also, the renting affordability, suburb is good. Schools are good. I'm not able to afford that area, still, my income is better. And then, because of the renting affordability, the rental prices will go up. So then you investing in a better suburb, where the cash flow will be better. Capital Growth is better. You have better tenant opportunities and and the type of property which will select over there that also matters, like you just get into the suburb, and then if you buy a property which is facing towards main road, then you're killing the growth, because in that suburb, when you're exiting, or you're buying a product where that suburb is into the Coit street, or on the cul de sac with the Night street and and then close to the transportation, close to the schools, then that that that entire asset will be outperforming. No, in fact,

Mudit

like you rightly said, the main road. I've seen properties which are bang on the main road. Very good suburb, very good appeal otherwise, but being, just being on the main road six months. Is eight months, the property is still lying on the market, while other properties are just selling within few weeks. But this property would stay there for six, six months, eight months, then there will be some buyer who will come. And of course, you would have bought it at a little lower price. But then exiting also becomes so tough that then you have to let it go. And if you are, if you are, if your plans are, of buying something else, moving there, everything becomes a problem, because you're not able to exit easily from that kind

Parag Dixit

of property, absolutely. So investing with an exit in mind. Also, that also brings us to this fact that I, when I'm investing, I need to know what I'm going to get into and what will happen when I exit. So I can't be I can't imagine. I can't think that okay, I will be there in this property for for for lifelong, for there, but I'm going to exit at some point of time. And I understand that risk, but as an investor, I definitely risk is something which I have to live with, right? So I am, I would say, Okay, I am taking the risk of uncertainty. I am taking the risk. That's my mindset. That's my positive mindset, that I carry that uncertainty with me. I know there will be, in a 30 year term of the loan, there will be 10 years where the rates may rise. There will be 10 years where there will be, there will be issues, abnormal things like last 15 years they've been, there's been a covid, and there's been GFC. There's so many things which have come in that uncertainty comes in inherently to me as an investor. So I accept that risk as an investor, that okay, that risk of investment is going to be there, and I accept that there is a risk versus reward in it. But while accepting this, while accepting that these are the ways of investment, I am in as an investor. I know I am, what am I getting into, but I also keep that exit in mind that if everything goes well, when I want to sell this property, are there only investors which are going to come and buy, or they are going to be investors and owner occupiers, both who are going to jump into my property. And hence, I enjoy a mathematician, and I enjoy an emotional purchaser, and both of them can get me a better price when I want to go out of it, and better wealth creation when I want to go from

Mudit

there, absolutely right and 100% correct that see, without no without any risk, there will be no reward as well, right? So the idea is not to just randomly take some risk. But idea is to do some calculated risk, what your budget, what your capacity allows within that, and what your risk appetite is within that. Take a risk with a with, of course, there will be that kind of reward in mind. And when you're talking about risk, there could be different kind of risk. One is the market risk, right? Like you're saying, there could be events which can happen in the globe, anywhere there will be wars happening. They can anything can happen. So you have to accept that as a part of an investment, there will be no investment which will be very, very smooth, right? Right? There could be risks at your end, also, which, which? Some job change, some, some kind of things. Something happens in the family. Those kind of risks are always there. But we live with those risks. The idea is that, how do we mitigate those risks? That is the whole idea about, right? There is will be a risk. How do we mitigate? How do we manage? And what are we doing taking that risk for? There has to be an ultimate reward at the end of it. But yes, yeah, sure.

Parag Dixit

And it's important, because when we are looking at risk, when we are thinking like an investor, I think it's more it's also important to for us to inherently understand our own self, that as an investor, what do I think and as an owner occupier, what would somebody else be thinking? And I how do I marry these two thoughts? So as an as an investor, if I would, if I would love to put down so as an investor, for me, my goals are very important. My goals in the sense that I'm looking at my return on investment, I am looking at what kind of a cash flow is going to come in. I am looking at what kind of a capital growth is going to come in. So for me, my goals of achieving that wealth, achieving that that cash flow, achieving that capital growth, achieving paying trying to pay off my mortgage, achieving to have a good plan for me to in the future, whether I want to upgrade my house, whether I want to do something else with it, do holidays. But I have a goal in the end, for investment. So as an investor, my keen, one of my key mindsets is that I want to have a goal, and I understand that for achieving that goal, there will be various paths I will go through that and to design and as and I can form ways of going that, you know, right? There can be a long term kind of a way where I say, Okay, I'm going to be invested in 10 years. But I also can have a short term way, right? Yeah, there

Julius

are certain ways of investment. So when we look at the objective of the investment, then you define a strategy. There are pockets where you could actually go. And you know that, okay, they are the regional pockets, or they are, they extremely Super Regional and but you know that, okay, there are a lot of investors are getting there. They need to know your exits. Yeah, few investors. Properties. You can think about long term, cash flow is better. You have timed the market properly. You're buying a property in good socio economic area where that suburb has already owner occupied, choice. Also, the yields are better. Then you can keep those properties for the longer term. There are a lot of properties are like random flip so you

Parag Dixit

select those properties short term,

Julius

invest in short term. Yes, get those properties, renovate and flip it and then make some money. So it depends on the type of goals which you define every investment property is like a long term kind of investment. But majority, when we look for the properties in investment, in goal in mind, then it has to be objective based purchase.

Mudit

No, absolutely. And then there are different like you're saying is strategy could be whether it's short term, long term. Similarly, there are other strategies you can think about as an investor. When you start thinking about, okay, in I can have different ownership structure. I can buy in my name, or I can buy in the name of a trust, or I can buy under SMSF. I can buy under Company, and for different kind of properties, different structures are better. There are different tax benefits in different structures. You can also think about that I want to buy, but what kind of loan do I need to take? I start paying principal interest or interest only. This all depends on what your goal is as an investor, what your budget is, what your affordability is. How will you manage the cash flow, and how long do you want to sustain it?

Parag Dixit

Absolutely right? And you're, you're right. As an investor, I look at all these things, you know, I can look at saying, Okay, I want to manage my cash flow, so I'll have an interest only loan. I want to manage, I want to dot I want to have tax benefits. So I'm looking at getting 100% equity, and I'm looking at getting, maybe I'm looking at making a portfolio. So I say, I am, I am happy to go a higher interest rate, and I and can go to a non bank, lender. I am happy to go to have to buy under trusts, under SMSFs, under individual name, company structures, lot of stuff happens there. So as an investor, my mindset is to be able to grow my portfolio, is to be able to find ways that I can invest, but I am also mindful of what are the taxes which are going to be there. You know, tax benefits is one bit, but the other bit is the land tax and all those elements which come in. So I am very much aware of that bit as well when I'm looking at how an investor would think, and similarly, there will be a very different way an owner occupier would think as well, right? So an owner occupied would think a bit differently from their parameters.

Mudit

In the mind of person who is looking to buy a house, are very, very different. First thing is like, is this where I want to raise my family? And it has nothing to do with the capital growth or cash flows or anything it's more about. Is this an area I want my family to grow in? Is this convenient for me? So if I have to go to I have to go to office every day I have to drop my kids. Is this going to be convenient location for me? Is this neighborhood safe for me? Are there good schools for my kids here? Yeah, if my, if my family, larger family, visits me like something life. So is this, does this allow me I want to go to city every, every weekend, and is this a lot? Does this allow me to get access to that easily? So there are so many different factors which go in there, and it and it has. And these are completely independent of numbers, completely independent. Of course, everybody will operate in their own budget. But when I look at the property, I'm thinking, does this give me stability emotionally, right? My wife will be happy here or not, or over a cup of coffee every, every day I'm going to listen from her that, why did you buy this property? Right? So then I'm not thinking numbers. I want

Parag Dixit

to buy a house where we live happily, absolutely right? You need stability. You need lifestyle. You need your comfort of staying there. You need to you need to feel happy when you walk inside the door. You need to really feel nice about it. You feel that place is a warm place where you can enjoy with the kids and

Julius

good socioeconomic good school, concentration of not concentration of single community, because you need a diverse community also. Yeah, absolutely right. Because when you look at the schools or the community related functions, or if you go to the park, then you should be diverse,

Parag Dixit

yeah, and you need to have friends around you, family around you. You You love to be there, and this kind of stuff and those then you, then you're willing to pay a premium as well. Unlike an investor who doesn't pay a premium, they want value, value, but as an owner occupier, I'm willing to pay premium for getting all these stuffs. And I normally when I was talking earlier, so normally I also, I do I'm more averse from going to the higher interest rate kind of products. I'm averse of going into I don't want to go to places where I would have to pay extra, or maybe I'll use more of government schemes, or 5% schemes, and if I'm a first home buyer. So I'm trying to get maximum benefits I can from there, I'm trying to get stamp duty benefits. I'm trying to get all that bit from this. As an owner occupier, i. My mindset is very, very different from an investor mindset. I am looking at more things which please my heart, rather than only with my mind that okay, I should make money out of it. I'm looking to look at my heart and say, Okay, I love this area. I love to stay here, and I love to be here with my dog, with my with my family, with my friends, with my neighbors. You know,

Mudit

credit person, correct? And that's where the whole, I think it's, it's that it's a science of, how do you mix both the mindsets together? Yeah, and you're able to do a little better, yeah, a little better than what you would do without going deeper into deeper, without thinking

Parag Dixit

about it. Yeah, absolutely. And, and I think the if you are able to learn from these two mindsets, as an owner occupied mindset, as an investor mindset, and you are able to invest with an owner occupied mindset, that's where you create a big win, because now you know that my asset, which I have got, which I have acquired, my house, my townhouse, My apartment is, is a winner. Whenever I go out back in the market, I have a winner in my hand, because I have got into something which is very good. I have got into an area where owner occupiers have a demand, right? So I, if I am able to, I believe in Sydney. So if I am going to give an example, there are two suburbs next to each other, and they just spread by a by a road. You know, there is, there is a seven hills on one side, and there is bocker Mills on one side, right, the average property price in Seven Hills is very different from the average property price at bocker Mills, which is much, much higher. It is much higher because there are, there is a particular school where people will want to study, and they will want want their kids to go there, and they would prefer the to be there versus this is a everyday suburb, right? So if people would say, Okay, I want to go there, I'm willing to pay a premium. So if I'm able to say, I want to invest, and I have got affordability, which is similar. So even if it's a house in seven hills versus a town house in the Bahamas, I can, if I choose, and do my understanding and I invest in Baucom hills, I may, I may have a winner in my hand and Shin which will grow much faster than anything else, right, correct?

Mudit

And that that plays an important role, again, as an as an investor, you're not thinking purely just numbers and buying just anything which is in in a suburb which is expected to grow. Yeah, exactly.

Julius

And that's that's the point, because if your budget allows you to get into a certain suburb, then try to explore more what is available in that price guide, which and then look at the properties where, okay, this above has only investor outlay versus in a similar state or different state. If I pick up a suburb where I might have to expand a wide bar 4050, grand, if you can do that, then yes, that suburb has more outlook of owner occupiers because of the certain parameters which we were discussing, then try to pick up that property in that suburb, or try to pick up a good pocket of that suburb, rather than getting into a purely investor driven suburb. So outlook of getting a capital growth in a long term basis will be much higher for an example, like when you only investing into investor driven suburb during the boom cycle, you would expect a good capital growth. But there are historical patterns which shows that when the boom cycle finishes and then investors run out of the market, and if that suburb is entirely populated by investor demand, then long term growth of that suburb is pretty poor, so, and if you don't time that market properly, then chances of getting a higher capital growth are very, very less. That's why that is very important. When you are looking for a suburb or investing into property makes that angle of owner occupied demand

Parag Dixit

as well. Yeah, true. So in that suburb, choice between two suburbs to be that. That brings us to, obviously, that thinking like an owner occupier and saying, Okay, I will go into that suburb. Also, if you're within that suburb thinking like an owner occupier, you say, okay, there is the school which is near me. The closer I am to the school, I am better off versus if my school is, say, two kilometers away from my house. I may be in that same suburb, but I may be missing out on what I get as a benefit, because there that school is not allowing, or that distance is kind of negating the benefit which I am arriving deriving from that that property in that area, right, correct, correct. And, and

Mudit

there are a lot of other things, like your properties, like we were talking about main road facing versus Park facing, yeah, let's say the park in front is a small children's Park, not too much crowded, so it has a very different appeal for a certain class of people who have young kids. Yeah. If your property is let's say if on the same street, there are three properties similar, and let's say one property is basic and one is i. A little more upgraded. Yeah, it's good looking. It has upgraded to the level by, let's say, 50 grand difference, okay, but the appeal to someone who wants to live is much higher, so that, although you might be paying debt 50k extra today, but that may result in an appreciation of extra 100k on that over next five years, yeah. So this kind of comparison, if you're in the same suburb, then what kind of property in that suburb fetches you extra is,