5 WAYS TO RUN YOUR INVESTMENT PORTFOLIO LIKE A WELL-OILED MACHINE
Many people try out investing in property. Often, they don’t succeed because they do not run their property portfolios like businesses.
If you want to create wealth through property, you must become good at investing in property. Sadly, property investors are often frustrated with their property investment portfolio and not making money.
The truth is, if it were easy, all property investors would be wealthy.
But you can run a tight ship and run your property portfolio like a business by implementing these FIVE things:
1. Separate entity, bank account & annual financial statements
Like any successful business, your property portfolio should be in its own entity and have its own bank account and annual financial statements. Building your portfolio this way provides better asset protection, is better for estate planning, improves financing capability, and is more tax efficient.
Trusts are critical to building and protecting wealth if you want to create financial freedom. Read our article, Why You Need At Least Two Trusts And How to Use Them Correctly, for more information.
2. Sufficient cash reserves
Expect the best, but plan for the worst. You must have cash reserves (emergency fund) in place for the unexpected, such as rising interest rates (that affect your bond payments), vacancies or tenants who are not paying or are squatting.
Ideally, you want at least 10% of your properties’ value in cash reserves. You do not necessarily have to save up for this – you can refinance your properties.
Read our article, How To Use Your Access Bond, for more information on how to do this.
3. Professional tenant management
When you own properties, you must manage tenants. Tenants are your clients, and you want to manage them well. This means proper vetting, rental agreements, property maintenance, property inspections and rental management system.
Read our 5 Ways To Manage Your Rental Property Portfolio Better article to learn more about this.
4. A property investment team
You cannot build a property portfolio on your own. You need experts on your team who can assist you in building and managing your property portfolio.
This includes mentorship, legal counsel, accounting, and tax counsel, financing, real estate experts, etc.
We elaborate on this in our article, How To Build Your Property Investment Team.
5. Software & automations
We live in the 21st century and do everything with software and apps. Why not automate your property portfolio with the correct software and apps like real estate websites and online portals, title deeds and historical information portals, rental management and property investment portals?
Our article, Automating Your Property Portfolio With Software, discusses effective ways to automate your property portfolio.
Are you ready to get down to business?