What’s the Right Legacy? Taking Time for a Family Talk

BY SONYA LOERA

June marks not only the halfway point in the year and the official start of summer, but also a favorite familytime event — Father’s Day. For many of us, the fact that we can share this occasion in person makes this traditional celebration all that more special.

We’re all coming out of a stressful, difficult period in our lives. This is true in both a personal and a business sense. Not surprisingly, for many of us, goals and priorities have shifted.

When the planning begins for that family gathering on Sunday, June 20, give some thought to asking for a little time to sit down and talk seriously about new desires and hopes for the future.

Many rental property owners have held onto their properties because they see this as their legacy. But with all that has happened over the past 18 or more months, is this still the right course of action?

Last month, my article focused on taking a spring cleaning approach to each of your properties and making an honest appraisal of what needs to be done. The suggestion was to do a property walk and categorize to-do items as to repair, replace or refresh. Then, the task was to obtain some up-to-date cost estimates and look at what might or might not be the priorities.

The last step in this process was to analyze the ROI (return on investment) of implementing any of the repair/ replacement/refresh items under consideration. This latter step required putting on your “investor hat” and taking more of a big picture look at the purpose the property serves within your real estate portfolio as well as the longterm reasons for holding the property.

A good number of apartment owners began purchasing rental properties thirty or forty years ago as a wealthbuilding tool and means of achieving financial independence. Over the years, those same investors often served as their own managers and, in many instances, handled their own repairs and make-readies.

However, is this hands-on management still practical? A lot has changed during the last couple of years. Rent control not only established limitations on how much rents could be raised but also introduced new levels of complexity in management and planning.

Then, the pandemic struck and even as restrictions have eased, the way that all of us conduct business has been transformed with online interactions that require certain technical skills and expertise. Making profitable ownership even more difficult are the skyrocketing costs for materials and replacement items, along with challenge of finding qualified professionals who are both reasonably priced and available.

So the question now becomes, where do you go from here? Is selfmanagement still the right path — not just for yourself, but also for your heirs?

First, perhaps, it is time to do some sharing and listening.

You’ve had your own challenges that have probably reshaped your thinking about what you want to do over the years ahead. And, if you are like almost everyone else, you are probably ready to do some travelling.

Your heirs have likely had their own epiphanies. They’ve experienced their own professional and family lives intertwining in ways perhaps never imagined. Childcare has taken on new meaning. Near-term priorities have shifted and, more importantly, they may see a completely different set of goals for both themselves and their families.

At the conclusion of my May 2021 article, I referenced the importance of confirming with your heirs that it is their desire and within their abilities to own and operate the property or properties that you are proposing will be their inheritance.

This Father’s Day might well be the right time to have that conversation, but from a slightly different perspective. Perhaps by sharing visions for the future and then talking about the role your properties might play in fulfilling those goals might well provide the clarity needed to move forward into a brighter and more meaningful future.

About the Author: Sonya Loera joined WR Gorman & Associate in 2013. With a background in accounting she serves as not only officer manager, but also as property manager, transaction coordinator and real estate agent. Founded in 1972 by William (Bill) R. Gorman, this Brea(CA)-based firm focuses on personalized wealth building through real estate. With a client-first philosophy, the firm serves as an expert resource for informed decisionmaking and transitioning that creates sustainable legacies for investors and their heirs.