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FOMO vs FONGO

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Transcript

FOMO versus FONGO. 

You may have heard that before, you may have not. But what do they mean? Fear of Missing Out and Fear of Not Getting Out. Perhaps two arguable of the most important terms in property.

When it comes to fear of missing out, it’s technically that ride up, everyone is going, “I need to get myself a property. I need to get myself a property now.” 

When it comes to Fear of Not Getting Out, otherwise known as FONGO, it’s on the downturn of property. “I need to get myself out of here. I don’t know what I got myself into.” 

These two periods are extremely important when it comes to a savvy investor’s journey, because in the Fear of Missing Out you’ve got people rapidly buying in areas; whereas if you bought it pre-FOMO coming on board, you may be in for some capital growth kicks as well as some potential rental kicks too. 

Now, the other news for FOMO is, as an investor who takes a step back and looks at the overall picture, they’ll know as well, “Is this area just going to be inflated from a lot of people jumping in? Or are there some actual drivers that support the reasons for people to jump in?” Perfect example is mining towns. They, at some stage, had FOMO, the Fear of Missing Out. “I need to get the cash flow here. I need to get this [inaudible 00:01:42], the new builds, the city is gonna go crazy, the jobs are going great,” but an investor looking between this could have seen that, “All right, is this economy based on one industry? Is there more to it? Is it going to be sustainable? Do the jobs have an end date?” So, these are some of the reasons why mining towns had that FOMO and actually experienced that FONGO too, right?

Now, when it comes to mining towns, that’s just one example, but what I’m trying to give you in terms of a message is for you to actually take a step back, sort of a why FOMO is happening, and why FONGO may be happening, because FONGO is the next part to look at. That actually can present some really exciting buying opportunities. 

Now, let’s take Sydney for example. At the moment, some may say that Sydney might not have the yield that will allow you to manage the investment risk through certain and uncertain periods. Example: Interest rates moving or debt levels increasing. But some may say, “Hey, there’s a big drop in prices from the previous times, and there may be some increases ahead, why not consider some places to manufacture equity through renovation, through development?” And look at the places when people are having FONGO, and they’re just having that Fear of Not Getting Out, so they’re really trying to sell or actively put things on the market, and as a buyer in a savvy position, you may be able to find some good deals.

Now, is that to say we’re actively buying in Sydney all the time? No, because each case and each opportunity is to be reviewed at the time, but that’s simply to give you an example of FOMO versus FONGO. 

So, my advice, or my suggestion, don’t get caught up into these two. Take a step back and have a review of why FOMO is happening and why FONGO is happening, and if there are opportunities for you to capitalize, take action. So, that’s it from us at InvestorKit, the experts in wealth creation, helping you take action.