Ask any professional what risk means to them and you’ll receive a different answer. But what is often the same is the proactive approach to managing it.
Risk can be associated with change. In the Lower Mainland property market, for example, skyrocketing prices impact owners in many ways, some of which are discovered unexpectedly. “With the extreme market movement in recent years in the Lower Mainland, it is important for us to continually communicate with our customers, so they are aware as soon as possible of the changes that will impact them,” says BC Assessment deputy assessor Raj Sandhu, RI. “This strategy usually initiates more customer enquires in the short term but provides less overall risk in the long term to our operations and to our clients.”
In private development, financial risk has swelled significantly. “With more competition and complexity in transactions, the risk associated with various opportunities has increased,” says Madison Pacific Properties vice president Nathan Worbets, RI. “Leverage has been readily available while yields continue to decrease. In order to mitigate risk, diversification has been important and I think you have seen developers broaden their expertise to allow them to look at different product types across varying geographic locations while also consolidating much of the contracting role in-house.”
Though often associated with financial costs, risk is about more than money. “I’ve learned that … there are other consequences such as safety, environmental, and reputational risks,” says BC Hydro property acquisition manager David Chan, RI. “Thus, we need to work closely with our colleagues and stakeholders to identify and treat these risks. We also need to determine the severity of these risks and the likelihood of them occurring.”
Re/Max Central residential realtor Dan McCarthy, RI, has some sage advice that applies to all areas of the industry: “The best way to avoid risk is by continuing your professional development by taking courses. Webinars, seminars, and more help to keep you on top of changes to the industry and to be aware of hot topics. You have to stay up to date at all times, given the hectic pace of this business.”
How do other RIs understand and manage risk? Read the Summer 2018 edition of Input, “Real Estate Industry Update,” for more. Download Summer 2018
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