“Real estate investment is not a numbers game. Learn from the koala’s ‘endurance strategy’ to succeed.”
1. Why You Shouldn’t Focus Solely on Numbers in Real Estate
One of the most common mistakes in real estate investment is getting overly fixated on sale prices and ROI percentages. When you treat these figures as rigid formulas, you risk being unprepared for unexpected market changes.
Key Risks of Number-Driven Investments:
Overconfidence in Assumptions: Assuming, “The price will rise eventually,” or “I can sell in two years,” is a gamble.
ROI Obsession: Real estate investment is influenced by multiple factors, such as timing, location, urban development, and market direction, not just numbers.
2. The Risks of Investing in Regional Real Estate
Investing in regional real estate often involves buying properties with smaller down payments and lower prices. However, focusing only on numbers can lead to costly mistakes.
Common Pitfalls:
- Chasing Heavily Discounted Properties
- Simply buying undervalued or heavily discounted properties without assessing long-term viability can backfire.
- Evaluate actual population trends, industrial growth, and future development plans.
- Focusing Only on Small Price Gaps
- While narrowing price gaps may seem appealing, overlooking location fundamentals (proximity to transport, schools, or workplaces) can limit growth potential.
3. The Relationship Between Cheonan and Asan
Cheonan and Asan, two cities in South Korea, are often grouped together due to their proximity. However, recent developments are shifting the dynamics between the two.
Key Insights:
- Asan’s Strengths
- Asan benefits from the presence of major industrial complexes, including Hyundai and Samsung, which ensure stable employment.
- The development of the Tangjeong New City (housing ~370,000 people) is expected to significantly boost the city’s population.
- Challenges for Cheonan
- Cheonan lacks the industrial foundation that Asan has.
- Asan’s population and economic activity are likely to pull resources away from Cheonan.
- Competition, Not Cooperation
- Despite their proximity, Cheonan and Asan are competing for resources, population, and business opportunities.
- Future investments must account for this rivalry and focus on cities with stronger growth potential.
4. The Interplay Between Politics and Real Estate
Real estate markets are closely tied to political policies, particularly tax regulations and multi-homeowner restrictions. These factors create a “ping-pong effect” between core areas like Seoul and regional cities.
Key Patterns to Watch:
- When Multi-Homeowner Restrictions Tighten: Core locations (e.g., Seoul) tend to rise in value as demand concentrates.
- When Restrictions Ease: Lagging regional cities tend to catch up, narrowing the price gap with major cities.
Understanding the relationship between politics and market trends is essential for making strategic investment decisions.
5. Conclusion: Real Estate Is About Strategy, Not Numbers
- Avoid Obsession with Numbers: Fixating on fixed ROI and sales timelines limits flexibility.
- Adopt the Koala Strategy: Prioritize in-depth research and a long-term perspective over short-term gains.
- Understand Policies: Keep an eye on national and regional policies to anticipate major market shifts.
“Real estate investment is not about chasing numbers. Like the koala, patience, preparation, and understanding the broader ecosystem will lead to success.”