Optimize Your Portfolio to Meet Changing Financial Goals
Change is inevitable, especially during significant life events like a new baby, divorce, or career shift, which can impact financial stability. Annually reviewing your real estate portfolio can be a great way to consistently align your investments with your financial and life goals. Here’s an outline to help you jumpstart your annual portfolio review.
- New year, new goals: What makes goal setting valuable is that it helps guide your decision making in life. By (re)setting your goals each year to reflect the new circumstances in your life, you can ensure that the choices you make are in alignment with your aspirations. These can include both short- and long-term objectives.
- Assess your financial status: Start by evaluating your current financial situation — your income, expenses, and investments. Understanding your baseline helps you identify the gaps you need to bridge based on your goals. With your real estate investments, there are likely two main things to consider: cash flow and wealth creation.
- Analyze cash flow needs: Determine if your passive income supports your desired lifestyle. If there’s a shortfall, calculate the additional income needed to reach your goals. Review the cash flow from your real estate; if it’s not meeting expectations, identify the gaps and devise strategies to bridge them.
- Evaluate property performance: Look beyond monthly income. Assess property appreciation in comparison to other homes in the area, return on equity, how much debt you’re carrying, and what the term(s) of the loan(s) may be (if any). Utilize your property manager’s insights and, if you invest with Meridian, request a Portfolio Performance Review to understand your investment’s growth.
- Take a holistic view: Stay informed about neighborhood trends, new developments, and factors like school performance and crime. Consider maintenance costs, tenant turnover, and how rents compare to the market. If your investment is not meeting expectations, we can help. We have new inventory coming available each month in desirable communities across the Memphis region.
- Set actionable goals: In service of meeting your goals, determine what the next appropriate actions are to help align your current circumstances with your vision of the future This may involve acquiring (or selling) a certain number of properties, re-financing properties, diversifying your portfolio for greater stability, or something else entirely. Not sure what actions to take? Contact Meridian and we will be happy to support you.
Spring is a time of rebirth and renewal. By being proactive, you can transform your approach to real estate investing and have peace of mind by making sure your portfolio matches your financial aspirations and lifestyle needs.
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