The real estate industry worldwide differentiates between 'end users' and 'investors' as distinct categories of buyers. 'End users' are those who buy property in order to occupy it themselves and 'investors' are those who buy property to earn from it (by booking profit when the rates appreciate or by leasing the property for regular income)
It is widely believed that what these distinct categories look for in a property purchase is equally distinct.
One needs to appeal to the heart and the senses of 'end users' as it is believed that the property buying decision is an emotional one for this category. Little wonder then, we see so many properties being positioned as tranquil, ticket to happiness, path to a better & more desirable/up market lifestyle, key to the family’s togetherness and so on and so forth. All emotional messages.
When talking to an investor the message sees a drastic change. You will hear phrases such as ‘value for money’, ‘high potential for price appreciation’, ‘low risk investment’ etc.
Messages meant to appeal to the grey cells and an individual’s rational thinking. No room for emotions here.
However, if we analyse motivations to purchase property closely, it is apparent that they are not very different for the so called ‘end users’ and ‘investors’.
Purchase of property is a large investment irrespective of the buyer and reason for purchase . It is never an impulsive buy and involves a lot of thought, deliberation and not to forget in-depth research.
Moreover, irrespective of the ticket size of the purchase, be it Rs. 10 lakhs or Rs 10 crores, a customer always looks for ‘value for money’. He/She wants maximum bang for the buck. And even he/she is a buying a ‘first home’, he/she will want to be assured that it is a sound investment which will appreciate in value as time goes by.
Think of the time when you first bought a home, weren't your thoughts on similar lines? Would you have bought the house if it was grossly overpriced and didn’t have any scope for rate appreciation?
During recent times, I’ve witnessed many homeowners worry and lament over the perceived depreciation of their home's market price. When queried on whether they were looking to sell it, they quickly retort with a ‘not at all’ or ‘never’.
So, if all home owners or more broadly speaking, property owners think of their homes/offices/shops as assets, isn’t it time that we in the industry acknowledge this fact and talk in concrete, quantifiable terms rather than in vague sentimental phrases such as ‘Attain Nirvana’, ‘Lead a Celebrity Lifestyle’ or some such