Having the long view in real estate investing

Having the long view.

My name is Kathryn King and I am an investor as well as a Realtor and company owner.  I work with owners of homes and small investment properties, mainly built of houses and duplexes and other small buildings.

Thinking over what sort of message I have, I started thinking about a financial book I have been reading.  It was written near the year 2000.  In the final chapter the author talks about taking a long view with regard to investments in the stock market.  Reading this at the end of this financial book was a breath of fresh air.  I need the long view in real estate for career, clients, and my own investments.

I don’t know about your experience of the past 18 or so months, but my experience as a person employed in the field of real estate and as that of an investor has been trial and tribulation.  I have experienced many things that I could view as failures and I think the opportunity lies in the ability to see them as hiccups on the ride.  To remain detached and keep stride I like the concept of taking the long view.

I did not have a short view or a “flip” mentality wit h regards to my real estate holdings.  However I did not anticipate the increased turnover, the decrease in rents, the sharp increase in concessions, and the literal demise of commercial real estate in the midst of an attempted reverse exchange.  With these experiences and the news repeatedly reminding me of the state of our nation, I somehow became a short view investor, losing sight of the end goal!  I can say the same is true for home owners and investors I know. 

Change has hit my segment of the market on a huge personal scale.

1. Clients and friends are being foreclosed on.  For many this is their financial vehicle going away.

2. Buyers have lost their jobs in the midst of home shopping this year.

3. Sellers are not understanding CAP rates—they never had to think about that in this decade.

4. Increased vacancy rate has had a very personal impact.

5. Default rental owners struggle with the concept of supply and demand, and rent as a pricing function.

6. The climate has required an ability to understand change as it is directly under foot.

7. My clients do not readily understand that economic factors are relatable to their investments in a very real and large sense. 

The end result of my experience is to plan for today’s economic climate as the future, and not to plan for increase revenue or rents in my planning.

There has been a powerful lesson in this period in time.  For one I had to remember that I purchased real estate investments as part of a long term retirement plan.  I had ideas about retiring early and the change of economy has helped me to take seriously the exit planning if I intend to take the plunge some day.  Another thing that I learned is to value that which we cannot place a dollar figure on.  In this time I have found opportunity to appreciate health, family, my new husband, my dogs, great weather, and the companionship of friends.