Annual property reviews
You wouldn’t drive a car for years without an oil change, but many property portfolios go years without review. It doesn’t take long for the costs to really add up.
Reduce costs
Reducing the cost of an investment property can provide serious benefits to an investor. Whether it be better financial returns or
improved cash flow to help meet cost of living, it does pay to stay on top of each aspect of your property portfolio. You should review:
- Property and landlord insurances;
- Property management;
- Loan(s);
- Depreciation (and ensure this is optimised); and
- Rental income.
Ensure the property is in good working order and plan repairs and maintenance proactively, where possible, to minimise tenant disruptions. Keeping the property in good condition can often minimise costs and maximise the returns you are able to achieve.
Keeping on top of your property portfolio minimises cost and maximises return. A few hours investment could save thousands.
Review performance
Consider the investment fundamentals of the property and suburb. Are demographics changing positively? Are you still positioned for outstanding growth and/or income? If you had your time over, would you have purchased the property and would you repurchase the property now if it were presented to market? If you are concerned about the performance of your investment, be sure to consider all the important things before actually selling the property.
Consider your broader goals
Ensure that you are on track to meet your overall investment and financial goals, rather than just being lost in the detail of a single asset. Is your portfolio providing the returns that you need? Do you need to save more money to purchase another investment? Are you on-track to meet your future goals? Are there ways to make your portfolio more tax-effective? Will you be able to retire when you want and achieve the lifestyle you desire? Being proactive with your investment decisions will minimise wastage and maximise returns.
Seek professional assistance
While there is a cost to professional advice, the benefits may be numerous. Know your weaknesses and strengths and seek advice where you need help. There is no point saving a few hundred or thousands of dollars only to be left hundreds of thousands of dollars poorer in the future.
Conclusion
There is no guarantee that your annual review will uncover the need for major changes, if any at all. However, it’s an effective way to reduce costs and better understand your financial position. Great investors are proactive and always looking for an opportunity to realise more profit.
About the author: Brenton has more than ten years experience in the financial planning industry. His specific qualifications include financial planning, margin lending, SMSF (self managed super funds) and direct shares. He is also an experienced investor.
Last reviewed: 24 October 2022
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