Some Say The Best Defense Is A Good Offense – ‘Keeping It Real’ Is The New Best Offense
Some Say The Best Defense Is A Good Offense – ‘Keeping It Real’ Is The New Best Offense

With only about a week to go before one of the biggest real estate investing education events of the year, people across the country are asking questions about their financial goals and whether or not it’s going to be possible to reach them in time for retirement, sending the kids to university, that emergency car repair – whatever the case may be, will you have the means to take care of it all when the time comes?

Building a healthy real estate portfolio is one way to set yourself up for years to come, but how does one do this safely to maximize profits and minimize risks? For a detailed look at hoe strategic investors stress-test their portfolios, I encourage you to read Secrets of the Canadian Real Estate Cycle. It provides an in-depth look at why strategic investors continually ask themselves questions like:

• How is my equity goal (Personal Belize) impacted by market value increases or decreases? (test with real numbers: i.e. 5%, 10%)
• What happens to my cash flow if interest rates rise half a percent? One percent?
• How much additional cash flow can I access if I increase my rents?
• What happens to my cash flow if vacancies increase?

Armed with answers to questions like these, investors can review their goals when needed and switch up the tactics they’re using to achieve those goals.

Staying focused on real-world information is a key to a solid investment system that investors can employ into their real estate portfolio. Investors who study the fundamentals use real-world information to make decisions about the properties they buy – they act with information versus emotion. The same thing happens when investors ‘stress test’ their portfolios to see if they are still on track to attain their Personal Belize. Even when market shifts evoke scary headlines and even scarier online discussions, the strategic investor stays the course. You understand that market shifts may call for sacrifices to be made – and even that is easier to do when you know you are in pursuit of meaningful goals!

Market fundamentals and potential shifts in those fundamentals are essential to understanding the real estate cycle. This information gives strategic investors a way to deal with a natural fear of failure. It helps investors stay the course even when the waters are rough.

Staying focused on the market’s key drivers is going to give you the most accurate depiction of where things are at in terms of the real estate cycle and will give the best information for decision making. GDP growth, job growth and population growth are some of the key structural components that support the long term cycle of a real estate market and will show you the areas that have an economic future. Market influencers should also be heeded as these factors are what pushes a market to overshoot the underlying economics. Record low interest rates, increased foreign investment, speculation – these are not direct economic actions, but they can and will influence the markets (either positively or negatively).

So what do you do if the headlines seem unclear and even when digging deeper to uncover the real information feels like a futile battle? You stick with the hard numbers – and those come from investigating right down to a specific house, on a specific street, in a specific neighbourhood. Human beings are emotional by nature – sophisticated investors have the ability to turn off the emotions and fall in love with one thing: the numbers.

Come 'get real' and learn how to invest successfully in real estate for yourself and your family. Join me and my team and learn how to reach your own Personal Belize at the ACRE™ Live Program, hitting Edmonton on October 19-21 and Vancouver on November 2-4. Your opportunity to change the destination for your financial future is in your hands, you just need to decide the end point and we’ll help you choose the right path. See you all soon.

Some Say The Best Defense Is A Good Offense – ‘Keeping It Real’ Is The New Best Offense was last modified: October 10th, 2012 by maddy
 

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