How to spot if your property investor friends are suffering?
I thought I'd compile a quick checklist that everyone can use to determine if their 'savy property investor' friends are suffering in the market down-turn. See if you can identify the following traits among certain people in your group of friends:
- They have learnt the 'new' ramping catch-cries being touted by the suffering property industry. New lines such as "Flat growth is healthy" and "A small short-term dip before the next leg up" have now become common-place. Remember, these suffering property investors once attended all the seminars, they had read all the books, and they could recite every outrageous property ramping one-liner ever created. And now they are still just as good at uniting as a group and adapting to the new status quo - because they must stick together as a pack. They feel comfortable with safety in numbers.
- On the first Tuesday of every month, if the RBA leaves rates on hold, the suffering property investor will be ecstatic. Pheww - they can breathe easy for another month. It almost gives them a short-term natural high. Try this: Pick up the phone and give them a call next time the RBA leaves rates on hold. I guarantee they will sound like the happiest person in the world (until the next repayment on their negatively geared rental is due, of course).
- When the BBQ topic turns to property, low and behold, the suffering property investor is now silent. Cue the crickets chirping. They were once the most vocal supporter of buying rental homes, and they staunchly opposed anyone who dared to challenge their self-righteous way of thinking - you couldn't keep them quiet. But now, they will sit there looking deliberately un-interested in the conversation, and often in complete silence. If anything, they will be the first to change the topic of conversation.
- In a one-on-one conversation with a suffering property investor, they will now attempt to impose their unfortunate life onto others who haven't 'taken the plunge' and bought 7 rental homes themselves. They feel they must bring others down to their level, and as such, they will now actively encouraging others to buy a rental property, but with much more urgency than in the past - but not because they genuinely want to help their friend make money, but rather because they fear being 'left behind' as the market collapses. If they manage to convince others to buy an investment property, then they too will fall together at the same rate. Remember, safety in numbers.
- When cornered by a non-investor, the suffering property investor will attempt to quickly point out any pro-property media headline (becoming less and less common by each week) and hang off every word being said. "We've got an increasing population", "Rents are tipped to rise", "Property prices are tipped to recover next year" etc. Listen to the tone of their voice as they speak. Once super-confident and on top of the world, they are now an un-certain, nervous, quivering mess with no conviction in their dialogue whatsoever.
- When invited to attend a social gathering that involves spending money (eg going out for dinner as a group, going to the theatre to see a show etc), the suffering property investor will use every excuse in the book to get out of attending. Every excuse from "The wife's got a headache", to "Sorry, we've already made plans for that night", but never, I repeat never will you hear them say "Sorry, we just can't afford it". When people are suffering financially, they tend to bunker down, socialise less, and in general curl up into a little ball and wish they could wake up when this horrible dream is over. But they will NEVER admit defeat and concede that their investment was a dud.
Feel free to add to my list when anything else comes to mind.
