For many, building an investment portfolio means handing over a sum of money to an advisor and trusting in them to make the decisions that are in your best interest. Most people do so and then turn a blind eye, willing to assess their investments at a later time. This strategy may work for traditional investing, but for those interested in investing alternatively and building a portfolio of property, a more detailed approach is needed.
It’s important to remember that property investment is not a “set it and forget it” scenario, like baking a cake, where you can dump a bunch of ingredients into a pan, put it in the oven, and then come back later and have the exact desired result you were looking for. The global economy is so closely correlated to today’s market, meaning all external factors play a huge part in the success of your property portfolio. Maximising the potential of your portfolio requires continued reviews to ensure external factors have not changed the outcome you initially foresaw.
Below are three considerations to take when reviewing your property portfolio in 2017 to ensure you are properly informed to make the best decisions possible for your investment.
Smart investors stay in touch with their portfolios. First of all, it’s always a good time to review your holdings. Over 70% of people do not even take the time to enter their portfolio into a spreadsheet let alone review where their money is currently placed. A lot of investors do not realise the full potential of their portfolio due to not managing the funding and returns in the correct manner. Make sure to play an active role and keep a record of your portfolio so you can quickly reference it when necessary. If you utilise an advisor, check in with them regularly to assess performance.
Consider the good and the bad. Listing out the outgoings as well as the gross incomings of a property portfolio can be a scary proposition. But unfortunately, not doing so can leave you with an investment that does not offer the return you require. Don’t just write a check; take the time to consider every situation that could cause an impact on your investment, both negative and positive. This will enable you to chart a course to the return you are seeking.
Your goal could be closer than you think. The only way to move forward with investments is to get a clear idea of exactly where you are now and what assets you have to achieve your goals. If you aren’t keeping an active eye on your portfolio and your returns, you won’t have a real sense for how close you are to meeting your goal. If you’ve gotten close to your intended goal you may decide to shift some of your investment around and be more conservative, as to not take a dip if something negatively impacts the market. Conversely, you may decide you’re willing to be a bit more aggressive to push yourself over the hump. By keeping an active eye on your portfolio, you’ll always know where you stand.
To schedule a free, no obligation portfolio review, please contact us at email@example.com or by calling 01793 858271.
Neil Willis, Managing Director, Rycal Group