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Property Portfolio Review

Home / General / Property Investment Portfolio Review is a Must Today

May 20, 2018 by Rod Peirce

Investment property review is crucial. Active Invest clients buy property to obtain capital growth and/or rental returns, which enables them to achieve financial freedom and independence planning for retirement and beyond.  Investing in real-estate is not just about buying well. An investment property portfolio review ensures you understand how your portfolio is performing comparatively to the market and inflation so your plans for financial independence remain on track.

Too often the operating cost of the portfolio is not measured and reviewed. At Active Invest we analyse the performance of your property or property portfolio (on a property by property basis) and identify how and where your portfolio is, or isn’t performing, what opportunity there is for future growth potential  , what opportunity to access increased equity for re investment , review the current operating costs and then provide options for your consideration based on the results.

We typically measure, CAGR, opportunity cost of savings re invested, incomes vs market to establish income erosion opportunities, review of future net equity based on loan amortisations etc, to name just a few important considerations.

Property Current Value Current Loan balance Long Term Market Growth Loan Balance in Time years Future Value Net Equity Position
21
Reservoir $593,000 $347,000 5.00%  $        148,753 $1,652,504 $1,059,504
  • Typical report output example

Most recently our Portfolio Review has proven to save our clients thousands of dollars in operating costs. Some clients chose to utilise this extra cashflow to reduce debt, some re invest to support further acquisitions, the benefit of the review is simply to understand what is happening today, where could the portfolio be improved and more importantly what opportunities exist to extract the most efficient outcomes from your portfolio. Outcome of a recent client portfolio review detailed the following savings.

Property Current Loan balance Current Interest Rate Market Annual Savings
Rates
Reservoir $347,000 4.75% 3.69%  $              3,678
Caroline Springs $347,000 4.30% 3.89%  $              1,423
Meeniyan $202,500 4.88% 3.89%  $              2,005
Glen Eden $515,058 4.73% 3.89%  $              4,326
Surfers Paradise $152,000 5.06% 3.89%  $              1,778
Totals $1,563,558      $            13,211

Significant savings can be achieved as seen above. With savings the clients had a number of choices, they could  bank the savings and reduce debt, the savings, if reinvested could support an extra $293,000 in borrowings which could allow them to buy another property potentially, based on a 4 % rental yield could generate $ 11,720 of incremental rental income.

By reviewing your portfolio it allows you to plan for the future and make necessary  changes to strategy  and actions to deliver desired outcomes. Failing to review your portfolio could and is costing some investors many thousands of dollars.  You work hard to acquire the investments however our experience is the investor generally does not review their portfolios with the required frequency.

Happy Investing and here is to saving costs!

 

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About The Principal: Rod Peirce

Rod Peirce is a QPIA (Qualified Property Investment Adviser), a Certified Estate Agent, Certified and Accredited Finance Broker, Accredited Credit Adviser, and a member of Real Estate Institute of Victoria, Mortgage and Finance Association of Australia, and Property Investment Professionals of Australia.

But most importantly, he’s been buying, renovating, developing, and selling property – with his own money – for the past 30 years. Thanks to the strategies he has developed, he and his wife have been able to become financially free through property investment.

For many years, he’s been helping clients do the same and has been directly involved in more than 2,000 property settlements worth more than $1 billion dollars.

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