Saturday, 27 August 2011

7 Secrets os a successful property investor - Secret #7 Exit Planning and Review

Exit planning & Review
Before you start building your portfolio you should consider your exit strategy because it’s important to plan with the end in mind.

Here are some case studies for different age groups we put together to help show the typical starting scenarios.

You can then plan your exit – here we have some exit strategies for you to consider.
You should discuss your plans and aspirations with your mortgage broker so that he or she can apply for the mortgage products which fit your timescales and flexibility.

If you want a free discussion with us on this planning stage of building your portfolio then please give us a call and we’d be happy to help you get started, regardless of whether you use us or not.

Every 6 months you should look at your portfolio from 3 angles:
  • Rents and whether you can increase rents – your letting agent should be writing to tenants 2 months prior to the tenancy end date if you are adopting secret#5 and so its important that existing tenants are notified of an increase in rent with good time for them to move out if they are unable to pay. You should conduct a rent survey on the property again in good time for you to determine whether your rents can be increased. Failing to do this every 6 months can cost you a lot of money – especially if you have a lot of properties.
  • Mortgage reviews – make sure you are talking to the same mortgage broker about your portfolio. He or she will be right up to date with the latest mortgage products and the market changes and because they understand your goals , they will also be able to recommend which products are going to be reduce your monthly payments and give you the flexibility to move onto your next property in the planned time frames. Therefore it is really important that you build up a strong relationship with the broker so they are able to come alongside you at any time. We recommend you look to review your mortgages every 6 months.
  • Equity review With Secret number #2 – Carry out a valuation of your portfolio. You will also be receiving all rental profits and paying them into your buffer (i.e. rainy day account , cash approximately 15-20% of money invested should be in cash) With the rent reviews complete and the mortgage review complete you will be able to see how much you can borrow and top up your buffer) All of our investors in keeping with their overall exposure – so the bigger the portfolio the bigger the buffer.
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