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Tuesday’s Tip #55: How to Survive and Thrive

By
Real Estate Agent with Land Chasers

We're in a very difficult economy right now. Investors have to take seriously how quickly things could change. You could lose a tenant and have a vacancy for six months before any tenant is ever interested in your place. How will you survive that many months of mortgage payments? What about the unexpected leak in the roof? How will you repair it?

It's simple. Cash reserves.

The important thing to understand is healthy reserves not only protect you from serious problems, but they also allow you incredible peace. They are absolutely necessary. As BawldGuy states, "A generous reserve account is not merely an option. In no way is it a luxury. How long can you go without sleep?"

Get serious. You need to face the reality of our economy and protect yourself and your investments.

Tuesday's Tip: Protect your cash flow. Get reserves. They're in.

Comments (4)

Pam Joffe
Solaris Realty - Tampa, FL
Good evening - Good advice, unfortuantely many people don't have the ability to have reserves, Have a great evening.
Apr 29, 2008 12:16 PM
Shannon Livingston
John R. Wood - Naples, FL
Maybe more realistic advice would be to save your money when times are good, because you know that the real estate market fluctuates.  I wish I had cash to reserve.  My husband was laid off in November, I have a special needs son and I just started in the real estate business - I'm sure you remember how costly it is.  Did I just write the lyrics to the next big country hit?   Seriously - we are happy to be eating three meals a day.  When things improve I will certainly remember the "ramen" days and put cash aside.
Apr 29, 2008 12:27 PM
Krista L. Walker
RE/MAX Platinum Medford - Medford, OR
Oregon- Homes & Real Estate for Sale
Hummm.  I guess those 10% down investor loans might not have been a good idea
Apr 29, 2008 12:29 PM
Robert Machado
HomePointe Property Management, CRMC - Sacramento, CA
CPM MPM - Property Manager and Property Management
It makes no sense to invest in real estate without reserves.  To do so is not responsible.  Until you can handle the vacancies, buy and sell property to live in for yourself. 
May 01, 2008 06:04 PM