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Tuesday 15 July 2014

How to compare the Property Investment Portfolio

Nowadays, property investor tend to compare how many properties they had in their portfolio, e.g, if A has 10 properties, total loan is $1.5M and Compare to B has 4 properties also with a total loan of $1.5M. Are both of them are the same?

It is a tough questions to answer, it has to depends on what are they comparing too? Just purely number of properties? Comparing the quantities or qualities?

Look at the 6 investors portfolio below:


Investor # Property Loan Size Cash Flow Networth
A 10 $1M $10000 $1.3M
B 5 $500K $5000 $650K
C 4 $750K $5500 $1.0M
D 3 $1M $1000 $2.0M
E 10 $2.1M $2000 $1.5M
F 7 $2.8M $500 $4.0M

Which one would you prefer? Obviously if is very hard to choose from right?
Would you prefer investor A or Investor F?

Is there any different from Investor A Vs Investor B?
Which one is the riskiest investor?
Which investor has the most sustainability portfolio?

If someone just comparing the number of property, Investor A and Investor E has the same number of properties which is 10. Investor E has higher loan size and also higher networth. But the Cash flow for Investor E is lower.

As such, if someone just compare the number of properties own, is it good enough?




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