Show039:Prepare For the Worst- This One Tip Can Save You In Your Investing

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“I am prepared for the worst, but hope for the best”

Benjamin Disraeli 

 

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Preparation and due diligence is a key component of savvy real estate investing. No matter where you are in your investing career taking a minute to reflect on the importance you place on due diligence.

One of the things that I feel has allowed Kirk and me to be successful in our investing career thus far is that we are overly cautious.  When we are about to purchase a property or are even interested in a property, we are running detailed number analyses, checking out comparable for sale prices and rental prices.  Take the time to analyze the area itself- what types of jobs are available, what restaurants and entertainment are around- are important things to think about when you are going to invest in a property.

The truth is when you invest in a property, you invest in an area. 

Check out our property demographics checklist to help you analyze an area.

No one wants to invest in a property that is in a market that is declining or where people are leaving.  The strength of the market in which you are investing can go a long way for the strength of your property.

So what’s the big idea of this quote?

My husband, and investing partner, is a worst case scenario kind of guy.

The truth is it often drives me crazy!

If you’ve tuned in to our podcast at all you will hear at one point or another us joke around about him being the worst case scenario guy.  I often get on his case about it, but the truth is it has made us better investors.

He is always the one who is having us account for the extended, and often unrealistic, vacancies or catastrophic events happening.  And his coined phrase is, “if the property works with these things happening, then it’s worth our time.”

So when I saw this quote, I immediately saw the connection to our investing and investing in general.

If you are preparing for the unexpected vacancies, the roof having a leak in the first year, a local factory shutting down and renters leaving the area and the property works then you should feel pretty confident in your investment.

With this idea, you are over prepared for the best and when the worst happens you are not a sinking ship.

 

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