Let’s wrap up our three-part series on risk reduction.
Featuring:
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: We’ve been talking about risk and risk reduction. Risk is kind of an interesting phenomenon because the more risk you take, the more you’ve got to lose, but often it’s what you gained from it if you do it wisely. So let’s talk a little bit about managing risk.
Bob Nelson: Certainly managing risk is putting yourself at risk. Risk could be defined pretty easily as just simply uncertainty of outcome. If it was an absolute certain outcome, there’s no risk to it whatsoever. The only question might be, it’s kind of like death. There is no risk. We’re all going out the same way. The key is not having it happen for a long period of time.
Marcia Edwards: Risk reduction.
Bob Nelson: Yeah, we act safely.
Marcia Edwards: So to act safely in real estate and still move so you have some of the advantage of the upside, that’s what we’ve been talking about. We talked about sticking with what you understand, making sure you’re going in your wheelhouse and you have an understanding of where this big investment is going and where the risks lie.
Bob Nelson: And knowing what would influence its appeal. As an example, an apartment complex, if all of a sudden there was a large dose of unemployment in an area, then you know what’s going to happen. People are not going to have as much money and without as much money, they are not going to be able to afford to pay as much rent and you can pretty much forecast it, and there’s no surprise when that happens. The only question is, are you watching employment trends? Are you doing what you need to do in order to be diligent and ascertain what could happen that would negatively, as well as positively, influence the properties that you own?
Marcia Edwards: You are a steward of the property that you own and you will have to be attentive to the needs and anticipate what’s going to be next in the needs of your tenants and what the marketplace is demanding. So market trends and understanding you’re always a shopper, you’re always looking for a better opportunity at lower risk. You also want to make sure you’re protecting your investment with a bit of a defensive posture in regards to the risks that may be upcoming, like less employment.
Bob Nelson: Well, and certainly, I’m licensed in four different states to practice as a commercial investment broker, Oregon, Washington, Idaho, and Arizona. Why would I need a license in those states? Because there are certain areas in each state that are extremely attractive and certain areas that are not attractive. So if everything happens to start to turn negative around here, I could transport you into other markets that would be much more favorable.
Marcia Edwards: And for Bob’s clients, he does that. He keeps his finger on the pulse on your behalf.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.
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