Benefits Of Property Portfolio Master Planning

Property represents one of the best investment opportunities out there and planning your property portfolio can be one of the most financially lucrative steps you make. 

With dual sources of income available in the form of capital and rental value, investing in both commercial and residential property doubles the odds of securing positive returns.

Stockport based property experts, Fairhurst Estates, explains more:  

In order to generate significant wealth or achieve financial independence, you usually have to invest in several properties. Building up a portfolio can take time, and even then it is not simply a case of acquiring one after the other and waiting for the cash to start rolling in.   

There are important decisions to be made every step of the way. First of all, for each individual acquisition, forecasts need to be made about the prevailing market conditions – what are the price trends in that area? What kind of returns can you expect in both capital and rental income, and which should you prioritise?

These are not decisions that can be made once and then forgotten about, either. Property portfolio management is an on-going process – do you cash in on the capital value of a property when prices rise, or do you go through the process of a review to increase rent? And how do the potential income strands across your entire portfolio interact so you are maximising your total possible returns?

This is why taking a strategic approach to portfolio management is important. And that all starts with having a master plan.

Modern Portfolio Theory

In the mid-20th Century, a school of thought emerged in asset management that came to be known as Modern Portfolio Theory (MPT). In a nutshell, MPT is all about balancing risk and reward across a range of investments. It proposes that by carefully choosing the right range of low-risk investments, which individually might not promise huge rewards, you can optimise your eventual returns.

Find out more from Fairhurst Estates