Whether you are new to investing in real estate or you have a few years and a few properties under your belt, it is always a good idea to have a consultation with a Professional Property Management company. As an investor, it is a wise financial decision to sit down at least once a year, and make sure that your portfolio is performing according to your goals. If your goals are not being met, then this is a good time to reevaluate your performers and your non-performers.
There are four strategies to keep in mind when you meet with your manager or your management team. The first strategy is to focus on value followed by a focus on yield and cash flow. Next, you need to focus on the non-core strategy, and lastly, focus on diversification and liquidity.
A rule in investing you will hear over and over again is to buy low and sell high. When you focus on value, you can analyze what your current properties are doing and if there are properties you would like to buy that are following this rule. A yearly analysis of your properties will give you a glimpse into how your investments are performing in this way.
Next, by focusing on yield and cash flow, you can confirm your structures or your companies are providing the correct dividend and cash flow you were expecting. You can also study how the non-core strategies regarding your business are being directed to fit into your long-term goals of the property. You may have to be paying more for your property now, but analyze if the investment will pay out in the long-term scenario.
Lastly, are you following the diversification and liquidity rules that make you comfortable with your portfolio? This aspect can be tricky depending on many factors, such as to the types of risks your lifestyle can accommodate for. Are you balanced with some high-risk and some low-risk properties? Are you invested in multiple regions with a variety of tenant demographics to balance your risks? Do you have publicly traded properties or securities so that you have access to instant liquidity?
