by Guest Blogger, Joe Klock, Sr., CRB, CRS www.joeklock.com By no stretch of the imagination do I qualify as an economist, but with respect to the current recession, I have a case to make (and I'll try to make it brief).
No longer gainfully employed in real estate, my also-retired spouse and I now happily rely on it for an income stream sufficient to finance the lifestyle to which we have become accustomed and endeared for the past several years.
During our productive period, both of earned income and dependents, we stashed away what we could, diversifying our investments in accordance with conventional wisdom.
This diversification included some dabblings on what some are now calling Woe Street, and we watched them rise impressively, then fizzle out like financial pyrotechnics.
Fortunately, we never relied on them for a cash flow which is not likely to come from that source in the foreseeable future.
The bulk of our nest egg comprised real estate-related investments, which were and still are a kind of Teflon on the cookware of our retirement portfolio.
They continue to produce a steady income, while effectively protecting us from the damaging effects of the current recession. (The icky stuff is still there, but it doesn't stick on us!)
Had enough of these lame metaphors? Here are some facts:
The bulk of our present "spendable" flows from income-producing commercial real estate, mostly net-net-leased at rental levels which we deliberately set just a smidgeon below the market.
As a result of that moderation, whatever "loss" has occurred in market value is significant only on our personal balance sheet. In other words, the rent rolls remain constant and the money rolls in unabated.
Along a related route, we have granted short-term mortgages at attractive interest rates to responsible people with good credit records and significant equities. Neither have these been diminished by gloomy headlines nor the general malaise of the residential brokerage market.
Undeniably, there has been great suffering endured by well-intentioned but underqualified home buyers and overly-leveraged investors.
This is both regrettable and irreversible, except for such relief as may be provided by government intervention. (Too late to apply Teflon when the damage has been done.)
More to be censured than pitied are the reckless gamblers who flipped contracts, falsified documents and/or knowingly assumed risks that simply didn't make sense.
It's worth noting, though, that prudent real estate investors are riding out the storm with little or no damage to their financial objectives.
In a wider perspective, homeowners who bought (or already owned) homes within their means may understandably wring their hands over the attractive selling prices of years past.
However, they are mourning bonanzas which are relatively meaningless, given the creature comforts they still enjoy - benefits undiminished by the ravages of recession.
To make a long story longer, all of this is prologue to the case (no longer brief) that I wish to make here.
Real estate - the product and benefit package service offered by readers of these words - is an attractive antidote to the venom of economic downturns.
Your potential customers - representing more than 90% of the population, according to published estimates - should be encouraged to believe that if they are managing their present housing needs, but wish to make a move, they should not hesitate to do so.
Even if sellers are unable to realize the wonderful proceeds of yesteryear sales, there are compensating bargains in the market. (No gain, maybe, but no pain either - and no real loss!)
Likewise, those contemplating the purchase of a home should be helped to understand that the present plethora of listings, and the attractiveness of financing, may not be available again in the near - or even remote - future.
Victims of the financial bloodbath on Woe Street should explore the possibility of switching their allegiance to prudently purchased real estate investments, such as the ones which are enabling this humble scribe, et ux, to ride out the current storm.
Admittedly, some folks may be beyond any substantial help you can offer them.
But, among the majority of your prospects who are still afloat, there are many who may simply need to borrow the courage of your conviction that real estate is, in the long run, the safest and surest path toward financial security.
Even those whose planning cookware was damaged in the past could be - make that should be - introduced to the Teflon-like protection of real estate.
For countless millions of Americans over recent decades, the product and service that you offer has been the foundation of their growth during productive years and their security in a good life thereafter.
If you believe that, sell the Teflon effect of real estate to those who will otherwise be unprotected from the "icky stuff" on the Woe Street Of Broken Dreams!
No longer gainfully employed in real estate, my also-retired spouse and I now happily rely on it for an income stream sufficient to finance the lifestyle to which we have become accustomed and endeared for the past several years.
During our productive period, both of earned income and dependents, we stashed away what we could, diversifying our investments in accordance with conventional wisdom.
This diversification included some dabblings on what some are now calling Woe Street, and we watched them rise impressively, then fizzle out like financial pyrotechnics.
Fortunately, we never relied on them for a cash flow which is not likely to come from that source in the foreseeable future.
The bulk of our nest egg comprised real estate-related investments, which were and still are a kind of Teflon on the cookware of our retirement portfolio.
They continue to produce a steady income, while effectively protecting us from the damaging effects of the current recession. (The icky stuff is still there, but it doesn't stick on us!)
Had enough of these lame metaphors? Here are some facts:
The bulk of our present "spendable" flows from income-producing commercial real estate, mostly net-net-leased at rental levels which we deliberately set just a smidgeon below the market.
As a result of that moderation, whatever "loss" has occurred in market value is significant only on our personal balance sheet. In other words, the rent rolls remain constant and the money rolls in unabated.
Along a related route, we have granted short-term mortgages at attractive interest rates to responsible people with good credit records and significant equities. Neither have these been diminished by gloomy headlines nor the general malaise of the residential brokerage market.
Undeniably, there has been great suffering endured by well-intentioned but underqualified home buyers and overly-leveraged investors.
This is both regrettable and irreversible, except for such relief as may be provided by government intervention. (Too late to apply Teflon when the damage has been done.)
More to be censured than pitied are the reckless gamblers who flipped contracts, falsified documents and/or knowingly assumed risks that simply didn't make sense.
It's worth noting, though, that prudent real estate investors are riding out the storm with little or no damage to their financial objectives.
In a wider perspective, homeowners who bought (or already owned) homes within their means may understandably wring their hands over the attractive selling prices of years past.
However, they are mourning bonanzas which are relatively meaningless, given the creature comforts they still enjoy - benefits undiminished by the ravages of recession.
To make a long story longer, all of this is prologue to the case (no longer brief) that I wish to make here.
Real estate - the product and benefit package service offered by readers of these words - is an attractive antidote to the venom of economic downturns.
Your potential customers - representing more than 90% of the population, according to published estimates - should be encouraged to believe that if they are managing their present housing needs, but wish to make a move, they should not hesitate to do so.
Even if sellers are unable to realize the wonderful proceeds of yesteryear sales, there are compensating bargains in the market. (No gain, maybe, but no pain either - and no real loss!)
Likewise, those contemplating the purchase of a home should be helped to understand that the present plethora of listings, and the attractiveness of financing, may not be available again in the near - or even remote - future.
Victims of the financial bloodbath on Woe Street should explore the possibility of switching their allegiance to prudently purchased real estate investments, such as the ones which are enabling this humble scribe, et ux, to ride out the current storm.
Admittedly, some folks may be beyond any substantial help you can offer them.
But, among the majority of your prospects who are still afloat, there are many who may simply need to borrow the courage of your conviction that real estate is, in the long run, the safest and surest path toward financial security.
Even those whose planning cookware was damaged in the past could be - make that should be - introduced to the Teflon-like protection of real estate.
For countless millions of Americans over recent decades, the product and service that you offer has been the foundation of their growth during productive years and their security in a good life thereafter.
If you believe that, sell the Teflon effect of real estate to those who will otherwise be unprotected from the "icky stuff" on the Woe Street Of Broken Dreams!
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