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Healthy Systems for Successful Real Estate Investors | Karen Cupp Coaching

Hindsight is 20/20; without pertinent data, how can informed real estate portfolio decisions be made. Seasoned real estate investors acknowledge that they wish they had developed good tracking systems for their properties earlier. Often investors start acquiring properties without giving thought on how they will keep track of valuable data such as initial purchase, renovation, repairs/maintenance, and tenant history. Successful investors regularly analyze their investment portfolio performance which can only be done when all these data facts are present.

While there are online tracking systems to collect this data, first begin with a manual outline of what you might need to track. Keep the end in mind as you consider what information you might need to analyze a properties performance in your portfolio.

Below is a list of suggested items:

Purchase price and date

Loan information (rate, maturity date, amortization and appraised value).

Initial renovation and future outlined upgrades – This will provide your cost to put a rental into service and provide a capitalization cost for your accountant. Develop a timeline for the additional upgrades.

Current value (Periodically assess your current value (quarterly, semiannually or annually)

Loan to Value – use this to make refinancing or sale decisions.

Insurance – Policy numbers and coverage dates

Tenant History – Lease agreements and renewal dates as well as turnover. This is helpful as every time a property turns over it costs money. Keeping track of reasons for turnover can provide feedback on effectiveness of management style and process.

Service/Maintenance Repair Log – Keep a chronical list of repairs done on the home. Document repair, cost and service provider. Incorporate your annual schedule of maintenance such as heating/ac service, gutter cleaning, etc. Information is key to making good decisions.

If you have existing properties start now. Go back and build this data. Utilization of an excel spread sheet or google docs can assist you in collecting historical documents therefore bringing each property up to date. Remember it is all in the questions that you ask and the data you bring forward.

Once you have pulled all this data forward schedule time to do analysis on the performance of each property. Don’t let fear or busyness get in your way. Take time to consider all the pieces of information. If you have difficulty making yourself do this, schedule time with one of your trusted Real Estate Investment Group partners. There is something about explaining your portfolio to others that will shed light on your process.

Remember this is a wealth building portfolio that is your business. As a business person you owe it to yourself to be well rewarded for your risk. Consider, if you were reviewing an investor portfolio and it included these properties…. would you buy it? You won’t know until you get your tracking system in place.