Right now we’re going to discuss taking chances.
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: We’re here for another year, Bob, 2020 here we go.
Bob Nelson: Can you imagine that?
Marcia Edwards: They couldn’t find an alternative program so we are here.
Bob Nelson: Fortunately it’s a clothing optional day.
Marcia Edwards: But enough about us. What I wanted to talk to you about today was taking chances. We are very risk averse, given the climates previously in our history and in our lifetimes of recessions and depressions. Let’s talk a little bit about what we can do to make smart decisions but take enough risk to get some reward.
Bob Nelson: Well, you know it is interesting because the older I get, the less risk I am willing to take. But understand risk. There’s the composite, called risk is made up of two things. There’s real market risk. The chance that the outcome will not be favorable. That is risk. If you knew for sure the outcome was not going to be favorable, there is no risk whatsoever. The outcome is going to be negative.
However, the anticipation with real estate is the outcome will always be positive, be long-term and positive. It’s not necessarily a get rich quick scheme. It’s a get rich slowly but surely scheme. But every once in a while there’ll be a position in the market where things become bumpy. That’s not now, but again there’s this real market risk, but the other component is what you don’t understand, your lack of education, your lack of experience which equates then to education. It’s interesting because at that particular point, the more you know, the less risk there technically will be.
Marcia Edwards: Exactly. So when you’re looking at risk, what I think of is I think you’ve got to look specifically to you. What you’re talking about is your area of expertise, your comfort, and also what skills you don’t have that you need support in. So risk is really something that you can minimalize in real estate by the dexterity and the flexibility you have in timing and the resources you use for people that have the knowledge that you do not.
Bob Nelson: Well, and the important thing right now, this is a great time to take risk because interest rates are extremely low, exceptionally low, and you can get long-term fixed interest rates, because the component of interest rate risk, the chance that interest rate goes out from under you and turns your good investment into a bad investment, that’s not there right now.
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.