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.
