If an economic disaster turns your local housing market into mush, will you be poised to capitalize on the new opportunities?
If you answered no, remember now that it’s never too late to start thinking ahead. Whether the shift in the market comes this month, this year, next year or sometime after that, readiness is highly recommended. Real estate veterans who weathered the last downturn know full well that the spoils go to those who are best prepared and positioned for victory.
Few people would describe planning as one of their favorite activities. It involves hard work, serious thought and a willingness to consider both mildly unpleasant and worst-case scenarios that could occur in the future. But planning doesn’t have to be onerous. It can be a chance to open your mind to bigger and better opportunities that can lead to bigger and better successes. A turn in the housing market might mean fewer transactions and stable or declining house prices, but it doesn’t have to mean less-profitable businesses.
If you’ve been procrastinating about planning your future, here are some “why-I-can’t-plan” myths and facts that might help you shift your planning process into high gear:
Myth: I’m so busy right now with what I need to do in today’s hot market that I don’t have time to plan for a cold market that might never happen.
Fact: Planning takes time in the present, but not planning will consume even more time in the future and could be fatal to your business. The time you invest thinking about that future and how you’ll react to various scenarios will pay off when you are able to act quickly to take advantage of new market conditions. Set aside at least a few hours this week and next week, turn off your cell phone and devote that time to developing your own long-term strategy.
Myth: The future is uncertain and the housing market is always changing, so planning is a useless and wasted effort.
Fact: Uncertainty isn’t a valid excuse for not making plans; instead it’s a very important reason for having a well-thought-out plan. Uncertainty makes planning crucial because if the future were certain, the best use of resources and ideal course of action would be obvious. Embed the unknowable in your plan by setting up a number of possible scenarios and preparing to adapt your plan to whatever situation actually happens. Without a plan, you’ll have no choice but to react on instinct. If you panic or become anxious, you’ll be all the more likely to plunge ahead in exactly the wrong direction.
Myth: I don’t know how to plan for the future and it’s too difficult for me to learn.
Fact: Planning isn’t easy, but anyone can learn to do it. Start by identifying a specific quantifiable goal. Then make two lists: one of all the resources (e.g., time, money, skills) you have available to achieve your goal and one of all the possible ways you might allocate those resources. Decide which possibility is most likely to achieve your goal with the available resources. Then execute your plan. Be sure to monitor your progress and measure your results, so you’ll be able to learn from your experience and make an even better plan the next time. Once you get started, you may find planning isn’t as onerous as you expected it would be.
Myth: I’ve always been successful in any housing market without a plan, so I know I don’t need one now even if the housing market gets worse.
Fact: It is possible to be successful without a formal plan, especially if you have a lot of experience and good insight to guide your decisions. But how do you know you wouldn’t be even more successful with a plan than you have been without one? And wouldn’t a plan afford you more peace of mind that you’ll be prepared for the best-case and worst-case scenarios?
Myth: If the housing market softens, I’m going to fail no matter what I do. I don’t need a plan for that!
Fact: Failure is all too often the result of not thinking ahead and executing a specific plan for the best utilization of limited resources. Without a plan, resources are allocated haphazardly and incoherently. With a plan, you’ll have an analysis of your opportunities that will dictate how your resources should be allocated to achieve your goals. If you’ve never tried making a plan or following through with a plan that you’ve made, how do you know it wouldn’t work for you? Why not try it? Why not try it today before the cyclical housing market turns?
Marcie Geffner is a freelance real estate reporter in Los Angeles.
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