Real Estate Financial Plan™ Best Practices

When creating a Real Estate Financial Plan™ there are a number of best practices you should follow. These are a combination of tips, tricks and rules of thumb that will help you create your personalized plan faster and easier.

General

The following are some of the recommended general best practices:

  • Always keep a copy of your “Baseline”  Scenario so you can compare it to any optional  Scenarios you decide to run.
  • Run your  Scenario after each change to make sure what you entered or changed is what you really wanted to do.
  • Since  Monte Carlo take so long to run, always test your  Scenario as a single-run  Scenario before running it as  Monte Carlo. Further, try a 5 run  Monte Carlo before increasing to your maximum.

 Scenario

The following are some of the recommended best practices when dealing with  Scenarios:

  • Name your primary or default  Scenario “Baseline” so when you make copies and do tests, you can compare it to your “Baseline”  Scenario.

 Account

The following are some of the recommended best practices when dealing with  Accounts:

  • Run your  Scenario after adding each  Account and view the  Charts for that  Account to make sure your set it up correctly before adding more complexity and interactivity.

 Properties

The following are some of the recommended best practices for  Properties:

  • Add your Already Owned  Properties one-at-time first. Then, add Dynamic  Properties with  Rules to add them.

 Rules

The following are some of the recommended best practices for  Rules:

  • In many cases, you will want to add a separate  Rules for your expenses. This will allow you to manually test “stopping working early” and turn off just the income using specific months or dates.

 Goals

The following are some of the recommended best practices for  Goals:

  • We typically only setup a  Goal for Safe Withdrawal Rate and Cash Flow Toward Target Monthly Income in Retirement. We typically do not bother setting up goals for Net Worth or Cash Flow. Instead, just look at the  Net Worth chart or  Cash Flow chart directly.

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