Is your real estate investment plan in line with your investment goals? Bob Nelson, Eugene real estate investment broker, with Pacwest Real Estate Investments, discusses the importance of taking the time to evaluating your real estate investment strategy. This is part five of a six-part series on getting started in real estate investing.
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Whether you have yet to really get started on a real estate portfolio or you’ve been investing in real estate for years, the key is to know where you’re going because these times are fantastic times. The stock market seems to be screaming along. Everything’s working well and if you’re not involved, you’re wasting time and wasting opportunity. At the same time, in times like these many people start shooting from the hip because they assume doing something is better than doing nothing, even if they don’t really know what they’re doing. The better bet is to make a plan, and then do something.
As you plan your strategy, think ahead to the times when the market may be more difficult—when vacancies crop up a bit, and when operating expenses do not decline but your rent might decline. That’s a touchy situation that deserves attention.
Bob Nelson, Eugene Commercial Real Estate Investment Broker:
I’m not a gloom and doom person, but sooner or later there will be a recession. Are you in a position where you can survive nicely and even thrive during a recession? If not, now’s the time to start setting a reserve to cover the times that are not quite as exciting as these.
This is a great time early in the new year to step back and consider your investment plan, and setting a plan down in writing is best. It may help to think in terms of passing down your investments to the next generation. Write the document to explain to those beneficiaries why you’re doing what you’re doing and investing in the way you are—your goals and strategy. Explain why you own these assets. If something were to happen to you, such a document would be a tremendous help to your beneficiaries as they take over and try to make sense of your portfolio. But seeing that framework and strategy in writing will also help you now.
If you haven’t gotten started yet in real estate investing and you’re considering it, begin by writing down your goals. Ask yourself what it would take to acquire your first investment property. Your written plan doesn’t have to be perfect. In fact, you should expect to revise it many times. But the process of putting a plan in writing will help you to take the first steps toward becoming a successful real estate investor.
The Getting Started in Real Estate Investing Series is from the Bob Nelson and Marica Edwards “Real Estate Today ” Eugene, Oregon, radio show, which airs at 5:30 daily on KPNW.