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Time To Reassess

Your property portfolio should be run as a business, so make sure you treat it like one, writes Mark Honeybone.

By: Mark Honeybone

31 January 2020

The summer period is perfect for reassessing your portfolio and ensuring it is run like it should be. So how do you do this? First of all, you should have your longterm and short-term goals set. Things can change any day, and your goals may change because of that, so this is why reassessing your property portfolio regularly is imperative.

You may have inherited some money; you may have had a pay rise or a large bonus from work. You may have lost your job or changed it to one with more or less income. Your partner may have started work or ceased work. There are many reasons why your financial situation can change, which can allow you to pay more or restrict you to pay less against your property loan.

Your long term goals may stay the same, but your short term goals may well need to change.

Some Important Points Here Are:

• You may decide not to buy another property or increase payments due to additional funding you expected hasn’t come through. If it happens one or two years over a 20 or 30 period, it’s not the end of the world. Don’t get upset or stressed about it.

‘Your portfolio is either getting better or worse, so performing
a regular assessment on it is crucial’

• You may need to pay for maintenance issues or decide to add value to your property one year instead of paying money off the principal or buying more property.

• You may find yourself with more cash than you thought you would and instead of putting it in the bank on a low interest rate, you decide to buy another property. If you do this, of course you need to follow the principles of property investing, like buying well and in a good location and so on.

• In my opinion, paying money off a principal loan is a great way to get ahead. If you’ve had a pay rise or your income is more regular than it used to be I suggest paying debt off.

This enables you to have more equity, better cash flow and less debt. This also puts you in a great situation to buy another property if a good one comes along.

• Again, now is an excellent time to reassess your property portfolio. Check that the properties are performing like you hoped they would when you purchased them. If you have an underperforming property that is affecting your overall portfolio, you may decide to sell it. This might come unplanned, but don’t be stubborn and hold on to something when it may benefit your overall portfolio to sell it.

These days you obviously must be aware of how long you have owned the property to make sure you don’t have to pay any taxes.

And remember, your property portfolio is a business, so treat it like one. You must look at it regularly and make changes where necessary. Like life, it changes and doesn’t stay static, your portfolio is either getting better or worse, so performing a regular assessment on it is crucial. For me, the summer holiday break is a great time to do this.

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