Portfolio analysis is perhaps the most exciting and useful real estate planning service offered to clients. You provide a series of portfolio reports for your clients. You are putting your clients’ property holdings into a broad detailed, financial perspective. A trusted advisor shows clients the financial side and the long term financial consequences of their decision-making in their real estate portfolios.
Most portfolio analysis activities are essentially the same: you gather some information from your clients (see create a client profile below); then input the information into portfolio worksheets; and generate portfolio reports.That’s it. For each report, we provide instructions on how to interpret the report.
Here are the recommended steps in offering portfolio analysis services to your clients:
Go to “Create a Client Profile” and make sure that the information that you need to generate portfolio reports is there.
Select the Report you want to generate for your client. Here are the available reports:
Asset Portfolio Report- this report paints a picture of your client’s financial asset portfolio, including real estate holdings, stocks, bonds, retirement plans and so on. The report also shows the extent of diversification of a client’s asset portfolio. The report’s objective is to give your client a “feel” for how important a role real estate plays in his overall financial situation. It also convinces clients that property holdings are not just a place to live– they are financial assets.
Primary Residence Report- This report paints a financial picture of your client’s primary residence, including beginning and current equity; loan balances, and other financial information related to your client’s home. The report shows how changes in mortgage loan terms (mortgage rate, fixed-rate versus variable-rate; the term (15-year versus 30 year and so on) and property value affect the amortization of the loan and the accumulation of home equity.
Rental Property Report – This report shows clients the financial implications of purchasing a foreclosure property at a discounted price.
This report shows what a property investment would look like from a financial perspective. We purchase a simple rental property and generate both positive and negative cash flows, depending on down payment and rental rate assumptions. This report also shows the financials of a rental property investment, including rents, monthly and annual cash flows and capital gains.
Vacation Property Report- This report shows the financial performance of a vacation property including all expenses and rental income.
Foreclosure Report- This report shows clients the financial implications of purchasing a foreclosure property at a discounted price.