Reduce expected rent, add vacancy, include professional management even if you self-manage, raise repair reserves and test a costlier refinance. If the deal only works in the base case, it has little margin of safety. Compare the stressed return with a liquid, diversified alternative and account for the value of your time.
Put it into practice
- Write down the decision before acting.
- Define the risk in dollars and time.
- Review the result and improve the process.
