Having an annual portfolio review is the best way for you to position yourself for future real estate success. In the same way that you see your physician on an annual basis to understand your health and vitals, you want to see a Realtor to understand your property’s current value and long-term potential. It’s not a surprise that owning real estate is a basis for wealth and requires vigilance and the advice of an experienced professional to steward your investment. You can expect the following in a portfolio review.
Price Analysis
An understanding of the current market and where your property stands with regard to price and inventory levels. Here’s an example of an excerpt for property value:
“Given the current comparable sales within your area your property is likely valued at approximately $2,000,000. With your initial purchase of $1,000,000 in 9/03 and valuation in today’s market as of 1/18 you have an annual appreciation of approximately 6.9% per year.”
Value Preservation
In addition to having a snapshot of the current market it is beneficial to understand how to preserve or improve your property’s value over time. Here is an excerpt regarding a review of a property’s condition:
“If you are looking to remodel your kitchen and baths it may add an additional $30,000 of value if sold in the current market.”
Referral Suggestions
A third benefit of a portfolio review is a recommendation to quality service professionals who can assist with maintenance, repairs, or utilizing the equity in your home. Here’s an excerpt regarding a review of a person’s current mortgage loan program.
“Given your current interest rate of 5% and principal balance of $600,000 you could lower your monthly payment by $268 at the current rate of 4.25%. Here are a few lenders who can help”
Strategic Planning
There may be future decisions that affect your means of transferring or disposing of your real estate assets. It’s never too early to begin planning for your retirement and the future well being of your family. Here is an excerpt regarding future planning:
“In order to preserve the equity of your investment property when you sell it may be a good idea to pursue a 1031 tax deferred exchange; transferring the equity from your current investment into one that you want to hold onto in the long-term, and defer paying the capital gains tax.”
These examples are ways in which an annual portfolio review can help. It may require a Realtor to visit your home in order to understand these specifics, but it is a worthwhile investment of time that could set you up for a better retirement and greater financial success.
