Many people love New Year’s. Many write out resolutions and set goals. Most of us hope for a better future.
Since many people are talking about the new and the future at this time of year, you need to pause for a minute. Dr. Michael LeBoeuf reminds us that, “The great truths are too important to be new.” So, before we turn our attention to the new year, let me share some things I’ve learned in working with hundreds of clients for a generation in apartment investing.
Pick Your Hard
The culture surrounding us alleges there is an easy way for almost everything. Don’t be fooled. Everything worthwhile you’ve ever done has been hard. That’s not likely to change in this new decade. Doing hard things is how we make life better for ourselves, our loved ones, and our community.
Last year, Sandy and I took a whitewater rafting trip. During that time, I reflected on similarities among life, investing, and whitewater rafting. One of the most important lessons is about drifting. When you’re drifting, you’re moving at the whim of external forces. Drifting is movement, but not necessarily where you want to go or toward your best outcome. Drifting could lead to declining property condition, falling behind the market on rents, or missing special opportunities.
Great investors close. In my decades of brokerage experience, I’m unaware of any of my clients who believe they made a mistake by paying a half percent too much. Alternatively, I know more than 50 investors who regret not paying just a little bit more to capture the deal they missed.
Clarify Your Values
There are no perfect properties. A property that’s perfect for another investor may not be right for you. It depends on what you want. To make the best choice, you must know what’s most important to you. Knowing your values helps you make wise trade-offs and every decision you make will involve trade-offs.
Do Your Homework
Figuring out what’s important to you is the inward-looking part of homework. Learning about the market is another part. I urge new investors to devote some “windshield time” to driving the neighborhoods and learning about them. Apartment investing is a learning journey. No matter where you start, you should be a better investor next year than you are today.
Get Good Help
You can’t do it all yourself. Life is a team sport. Great brokers outperform the pack by huge margins. Take the time and make the effort to learn how to find a great broker. Then plan to make your learning journey with him or her as your guide.
Those things are as true in 2020 as they were in 2010. What changes is your situation. Heraclitus reminded us that we can’t step into the same river twice, because the water is always flowing.
Take time to review your situation and your investments. The great investors I’ve worked with do this. New Year’s is a good time. Here are some questions to ask yourself.
Has my life situation changed? Many investors chose to shift their investments to a different asset class as they age.
How might the new laws about rent control, density bonus, etc. influence my investments in the next decade? If the 2020 rent control passes in the November 2020 vote, what effect might that have on my investments?
What’s my legacy? Besides the cash and the keys, what will you leave behind? How will you be remembered? You make choices every day that affect your legacy.
We’ve helped property owners assess their situation, sort out the options, and chart a wise course for the future. We’d love to help you. Click here and find out how Terry and his team can help you make the most important financial decision of your next decade.
Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.“