Tools for assessing property portfolio performance

Discussion in 'Information Resources' started by Younginvester, 8th May, 2015.

  1. Younginvester

    Younginvester Member

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    Hi all,

    Wondering if some of the gurus on here would mind sharing what tools, techniques, and calculations you use to review the performance of individual properties in your portfolio and the portfolio as a whole.

    What metrics are you primarily focused on and how do you accurately calculate these. Obviously gross and net yield, growth p.a, LVR would be key measures, anything else to determine how the investment is performing over time?

    Thanks in advance

    YI
     
  2. Ace in the Hole

    Ace in the Hole Don't compete, Dominate !

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    I'm not a guru and still earlyish in my journey, but to get to over 10mil of property so far, I've never used a tool or analysis for any property performance.
    It's simply been to buy quality property then pretty much set and forget.

    Once you've got it, let it do it's thing, no need to analyse it in any great detail in my opinion.
     
  3. bob shovel

    bob shovel Muppet

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    I think that all sounds very hard!

    I think looking at comparable properties to see what its current value and rents are sitting at and if you have access to more equity or if rent needs to be increased.

    keep an nice excel sheet with purchase price and current value along with some formulas for LVR, yield should do it. also you could add in expenses etc etc to keep an eye on money in and out
     
  4. spludgey

    spludgey Member

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    The longer I am in investing, the more I realise how much can be important for successful investing. I'm now interested in how China's economy is doing and what sort of soil an area that I'm looking in has and everything in between.

    While this may sound very daunting when you're starting out, it doesn't have to be. You can ignore this "noise" for now and just look at things like:
    • Yield
    • Demographics
    • Population growth
    • Population size
    • Planned and approved major projects in the area
    • Vacancies

    That's not a complete list, but it's the sort of thing that you should probably do in your due diligence. Having a good solicitor to hold your hand definitely helps too. If you find good people to work with, keep them on your team!
     
  5. Ace in the Hole

    Ace in the Hole Don't compete, Dominate !

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    I suppose it comes down to the style of investor you are too.

    Some like to analyse intensely, some don't.
    Both types can succeed highly, and both types can equally fail as well.
     
  6. Younginvester

    Younginvester Member

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    Hi Gents,

    Thanks for your feedback. I guess I am looking to treat my properties as a business to get the most return on my investment. Most business people I know regularly review their financials with respect to the business operation. However, i understand supported by your comments that property is a long term gain and therefore may not require such scrutiny all the time.

    I did up a spread sheet in addition to my usual property start up, ongoing tracking tool, and I looked at variables such as

    Estimated Property Value based on previous sales in area and RP data
    Estimated Growth
    Rent p/w
    Rental Income p.a
    Expenses p.a
    Depreciation Claim
    Cashflow p/w without dep
    Cashflow p/w with dep
    Gross Rental Yield Performance
    Net Rental Yield Performance
    LVR

    Question, what is the best way to calculate net yield %, do I include depreciation benefit in this calc? Or is purely income minus expenses divide by purchase price plus all purchase costs?
     
  7. Ace in the Hole

    Ace in the Hole Don't compete, Dominate !

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    If you're treating properties as a business, I'd guess you'd have to be all about the yield from day one.

    But what happens if you've held something for 6 or 7 years and it's done nothing, and looks like it will do nothing for some time to come so you sell it, then boom, doubles in the next 2 years.....
    It's not a "business" type you have a lot of control over.

    In my opinion, to get the most out of your property investments, you've got to know your plan up front, thenfully commit and stick with it when you find the right property.
    Due to the nature of residential property being relatively high value assets, you can't just sell some of it like shares, and the entry/exit costs are high, so you pretty much got to get it right at the start.
     
  8. Younginvester

    Younginvester Member

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    Appreciate the advice ace.

    big picture noted and back to drawing board for planning.

    Cheers
     
  9. bob shovel

    bob shovel Muppet

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    i agree with ace but its also personal preference.

    Sounds like youve put some work into it already so dont ditch it. you might just fond that you'll look at every 6 months not weekly. It would be useful for seeing cashflow and CF+or- after all assumptions and once you know some actuals once owning and renting you can see where you stand with it. Out of pocket expenses. Then when you go back to the broker you'll know your numbers, theyll use the numbers they need to but it will be of assistance

    I have done something similar a while back then forgot about it for a year or 2. so just dont make it overly complicated i guess
     
  10. scha9799

    scha9799 Member

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    I use an excel spreadsheet, put all the rental income, yield, buy price, current value, loan amount, interest rate....

    Once you build up your spreadsheet you just monitor your portfolio regularly, I guess this is an easiest way to manage a portfolio.
     
  11. Younginvester

    Younginvester Member

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    Oh yer im not reviewing weekly, i was more thinking yearly review of each property and then overall portfolio review yearly or as required.

    Agreed need to know your position fairly explicitly to go toe to toe with broker and banks and justify your capacity etc.

    Cheers
     
  12. Rixter

    Rixter $uper Investor (Retired)

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    Younginvestor, I have a tool I use to provide me an overall summary of our total property portfolio... including ppor if applicable.

    It will calculate your Total Portfolio's Value , Nett Equity/Wealth position, Income (rental & payg), LVR's & DSR's etc etc.

    I use to map annual progress along the investment journey and used it for refinancing purposes same as you're looking to do.

    There's a link to my series of tools below if you're interested in receiving them.
     
  13. Big Will

    Big Will Member

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    I use PIA for all my property portfolio needs.
     
  14. Rixter

    Rixter $uper Investor (Retired)

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    ....and developed by Ian & Jan Somers who kindly fund Somersoft for us all.
     
  15. wombat777

    wombat777 Member

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  16. Younginvester

    Younginvester Member

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    Thanks for the responses.

    Rick - have sent you a PM re: your IP tools

    Big Will - is PIA a single licence downloaded to a single computuer or can you use it accross multiple devices but with the one licence?

    Wombat - thanks, ill check it out and compare to PIA
     
  17. Rixter

    Rixter $uper Investor (Retired)

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    PIA is a very good program for PC running on Windows XP, Vista, Win 7, 8.
     
  18. psylink

    psylink Member

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    You can also run PIA on a Mac using Wine (https://www.winehq.org/)
     
  19. Rixter

    Rixter $uper Investor (Retired)

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    That will be good news for anyone running a mac.
     
  20. Investig8

    Investig8 Member

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    If the average Mac user is having any trouble figuring out winehq (free option) then here is an exceptional tool for Mac users, it's called CrossoverMac (https://www.codeweavers.com/products/)

    You can bottle any particular Windows build to suit your programs, I can verify that it works very well with PIA software.

    Also you can use parallels however you will have to stuff around with a specific Windows installation and all its updates etc (http://www.parallels.com/au/products/desktop/)