Secrets to building a $12-million portfolio: Lloyd Edge
Investor Lloyd Edge has successfully built an 18-strong property portfolio with assets spread across three states, now v...
If you’ve only got a few properties in your portfolio, you need to make sure you're taking a hands-on approach to investing, otherwise you could stuff everything up.
If you’re a busy guy like myself, trying to stay on top of your portfolio at all times can be tricky. I can sometimes be not as hands on as what I should or could be with a particular portfolio, purely because my time is just taken elsewhere.
There have been points with a portfolio where we haven't done anything for a year, where we haven't bought any, and then over this current financial, we went out and we've bought six properties or so.
I can see a lot of investors fall into this part. It's nice to do the nice things, the exciting things, but there's also a lot of running a property portfolio which sucks — just a lot of the admin around it.
The way I view our portfolio is: give me the key numbers, give me the headlines, benchmark numbers, let me know if there's a problem, whether or not this needs my time or it's just operational business as usual stuff, which is a bit of a headache that someone else can deal with and look after.
That's what I try and do these days: concentrating on the value adding stuff, and messing around checking statements on whether or not I've received the right amount of rent versus any costs that have come up because I've had to replace a hot water system. Someone else can tick that off, right?
Look, if you’ve got two properties, three properties, four properties, do it all yourself, but past that, it's going to get to a point where you've got to start prioritising your time and making sure you can add value. I like to think that sitting down with my A-team for two to three hours, to run through the strategic directions portfolio for, at least the next quarter, six months, is a good use of my time.
You should run your portfolio as a business; you have different product lines within that business, and the individual properties. Some perform better than others, some cost money, some add money, etc., so you talk about a balance sheet. For our readers that might not be that sophisticated when it comes to this sort of terminology, I recommend go and learn about it.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.