Well, that's up to you, but I have not received the OTA for my Nexus 7-12 yet either. I think it has been suspended. Given the circumstances of the N7 situation, I have already factory reset my N7 in preparation for the update. I believe it will help the update install much smoother. Many many people are reporting almost unusable tablets after installing 5.0 without doing a reset. I personally think the conversion to the ART run time is having something to do with it. After getting the OTA, if that ever happens, I may factory reset it one last time just to have it running on a really clean start.
Whether you reset it before the update is up to you, but many folks are reporting much improved performance doing a reset after the OTA installs. I'm just trying to give my tablet the best chance possible of succeeding with the update, again given all the issues with this upgrade.
That said, I have two Nexus 4s that just got the OTA and neither had to have a factory reset and they both are running perfect for me. Of course that's comparing apples and oranges with the Nexus 7, but I thought I'd throw that out there.