Ozzie Jurock
Sun
The new consumer is you and I. How everyone can be motivated is what has to be analyzed. Because that analysis is what will tell us how the new consumer is likely to act and react in any given situation.
And the analysis is difficult because the ‘talk people talk’ is different from the ‘walk people walk’. Buyers are liars. We say one thing and then go out and do the opposite. If you take a poll, people will tell you that they want service and human interaction in the satisfaction of their consumer needs. Then they blithely drive by the local, and friendly, corner store to the ‘big box superstore’ with the canyon of goods piled up to the ceiling.
They load up with a 27-year supply of pink toilet paper (it was such a deal), haul it out to their hulking off-road vehicle which costs more than a Cadillac but will never see a mud splatter in its life. Then they celebrate the $5 they saved on the toilet paper with a $6 expenditure for a no-fat double latte with an almond biscotti (in other words, coffee and a cookie).
The new consumer will fight to save, drive for miles, circle parking lots. Discounts are king. But he will also splurge $50 for a bottle of wine of ‘fine vintage, with superb aroma tickling the palate’. There are lessons here for all businesses not just real estate. We all have changed. We kill to save on high volume everyday items (even if we must buy in bulk and go out of our way to get it) but we will spend big-time for something we perceive as unique, special and ‘with it’.
If you had polled or surveyed these people to discern their intended consuming patterns, they would have drawn you a much different picture. What they say and what they do is very, very different. So you have to be careful when you’re evaluating the prognostications of the demographers and the economists. That doesn’t mean that you ignore them but you have to separate the myth from the reality.
One thing is for sure; we are different from what we were. The ‘pre’, ‘post’, and ‘current’ Baby Boomers want a certain type of home and a certain lifestyle and the degree to which you can accurately read these trends will be the degree to which you will or will not prosper in your real estate investments.
Retirees today have a dual pension, have more savings and will spend more. They want security without it being a ghetto and a workbench in the garage.
Re-creaters who think they want to rough it want to ‘see the cows but not smell them’ will pay a fortune for any waterfront while shouting ‘where is my sushi?‘.
There is the investor buying for cash flow who will buy 10 ‘normal’ units for $80,000 each and have a tenant pay off the mortgage to get (eventually) to that state of nirvana : “Ever increasing passive income”.
He or she focuses only on increasing the monthly cash coming in.
And then there is the consumer that needs new, ultra modern and will spend $800,000 – 800 sq foot suite on a stylish ‘with it’ renovated suite in a downtown high-rise.
This consumer knows the new trends…gone are bidets and granite countertops to be replaced with four jet showers and concrete (yes) countertops. It is a ‘custom showering experience allowing each user to select the perfectly individualized combination of water location, water temperature, music, ambient lighting, chromatherapy, and steam to provide a unique sensory showering experience.’
Smart technology in the kitchen, terra cotta floors, the TV embedded into the refrigerator (LG), bar-code reading self-programming microwaves ‘remote command centres‘ for your networked kitchen equipment including touchless kitchen faucet with tri-point sensing technology to turn itself and the two-tiered dishwasher on and off. Frontloading designer washing machines and dryers. Structured wiring and hidden ‘in every room’ stereo systems with iPod stations are complementing indirect ambient floor lighting and wide planked hardwood floors.
The new consumer is concerned with living longer and healthier. A whole new philosophy of physical behavior is developing. We cram ourselves with oat bran, we devour lettuce and spinach by the bale, and we torture ourselves with jogging and calisthenics and other assorted masochisms. Some of us do it for an improved quality of life; most of us do it in a misguided and vain attempt to slow down the clock and the calendar.
In real estate investment, what we really need – in concert with exercising our bodies – is to exercise our minds and direct our thinking to understanding ourselves. Do we want cash flow and a tenant to pay off our mortgage? Do we wish to insulate ourselves against inevitable downturns in any market and buy the low priced small town condo or do we want to flip that luxury condo (getting ever more difficult this year)?
Do some work, some planning it and you will create the resilience, the self-reliance and the security that you are looking for which few financial planners can give you. In the words of Dr. Tomorrow: “In the past we were a nation of have and have-nots, in the future we’ll be a nation of know and know-nots.” Get onto the ‘know’ side of things. Life is a wonderful journey. A journey. You don’t arrive somewhere and stay there. Make it an ongoing journey of personal growth of mind as well as body and no matter where the world goes you will be safe.
Before you invest in property, invest in yourself. Time, thought, and taking action all help to create opportunity. Inertia, mental sloth, and the unwillingness to roll up your mental sleeves and do your own research keep you insulated from opportunity. When you do take action you will be much more likely to avoid mistakes and encounter fewer problems.
I know people who will spend more time analyzing the fine print on a can of tomato juice than they do reading the fine print on an investment prospectus or examining a house before they buy it.
Successful real estate investing is like anything else. It requires personal work, imagination and individual enterprise. But you’ve got to do the important work yourself. Read that last sentence about a hundred times. There is no substitute or way around it. I do not know of any successful investor in real estate (other than the homeowner, happily and unwittingly riding up the escalator of inflation) who hasn’t learned the ins and outs of the business, who doesn’t actively and consistently scour the market place, make offers, and when they are accepted, personally does the due diligence.
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Ozzie Jurock
President of Jurock Publishing Ltd.
web: www.reag.ca
email: [email protected]
