Imagine, if you were a billionaire and you had a horse running in the Melbourne Cup…
You’d make sure it was a ‘Champion Thoroughbred’ right?
Well it’s the same with property investing – we regularly need to evaluate the properties in our portfolio to make sure their ‘winners’.
I typically ask myself whether my investments still stack up every six months.
I ask myself questions like: is it achieving the capital growth I projected? Are the rents increasing?
If I were shopping for real estate today, would I still buy this property?
Too many investors get complacent with their investments and even when they do review their properties, they don’t really know what they’re looking for.
This was the case with Carly, a client who wanted to buy three properties in the next five years.
She already owned two properties: a house in Melbourne and a small unit located in a regional Victorian town.
The unit had a small mortgage of $90,000 and was returning $135 per week in rent. Once tax and depreciation was factored in, the property was pretty much neutral.
As a low-maintenance, low-cost property, Carly figured it was doing okay, ticking along nicely and that it was a good idea to keep that property in her portfolio.
She couldn’t see the problem with holding onto it. But in my view, Carly was failing to address the most important question, which is: what is the opportunity cost of holding on to that property?
In reality, the unit was stagnant. It wasn’t increasing in value each year by any noticeable amount, nor was it returning positive cash flow.
It had a small mortgage of $90k but was worth around $140,000.
So my suggestion to Carly was to flick this low-performing property and pay off the mortgage, leaving her with over $40,000 after costs to leverage into a new investment.
And that’s exactly what she did. After meeting with her broker, Carly discovered that she could actually use the profits from the sale as a deposit on a new home worth up to $325,000.
So as you can see, reviewing your properties – really digging into the nitty gritty – can be crucial for your long term success.
Fast Track Your Property Investing Today
If you’d love to have a clear step-by-step ‘game plan’ to build a multi-million dollar property portfolio….
And, if you want to speed things up…so you can reach your financial goals much quicker….
Then your next best step is to book a Property Action Call, with one of my personally trained coaches…
In your property action call you will…
Discover how you could ‘tailor’ my ‘10 properties in 10 years™’ investing system…to your personal situation
Get a clear ‘snapshot’ of where you are now financially…so you feel clarity and confidence moving forward in leaps and bounds
Discover property investing mistakes that you may be making…that are hidden from your view
And much more. I value this call at $295. But it’s yours free because I want to ‘jump-start’ your investing.
The only catch is there are currently only a limited amount of spots available in the coming week…and they will go quick.