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!