Every successful real estate investor is supported by the unsung heroes of the industry: financial and portfolio advisor, property managers, contractors, and turnkey professionals. Not only do far too many investors neglect the wealth of professional resources at their disposal, but they don’t always make the most of the ones they have.
Your portfolio advisor is one of the best people to get to know. But you don’t just want surface-level reports and empty assurances: you want to know that you’re on the right track.
These are the questions you must ask!
Bring These Essential Questions to Your Next Conversation with Your Portfolio Advisor
1. What's your investment philosophy?
Your advisor isn’t just any professional. They build a rapport and a real relationship with you, the client, over time. They get to know you and what you want, so much so that they could easily invest on your behalf, and you’d never second-guess their decisions. But investors also must “click” with their advisors. What’s their philosophy? How do they approach their client portfolios? How does their philosophy of investment influence how they steer your decision-making?
2. What can I do to maximize my ROI?
Your portfolio advisor isn’t just there to facilitate new acquisitions. They’re there to make sure you’re getting the most out of your portfolio, no matter how big or small it happens to be. Ask about your ROI. What strategies can you employ to push the value of your portfolio further? Your first instinct should be to maximize the potential in what you already have – not just mindless acquisition.
3. What level of ROI and cash flow do I need to sustain my ideal retirement?
Your portfolio advisor’s job is to take your financial goals and vision for the future and translate them into actionable steps. You need more than a vague idea of what you want, too. Once you know roughly the sort of retirement you want to achieve (or any other investment-fueled financial goals), you can aim for a specific number.
From there, you must ask your advisor about the specific benchmarks you need to meet for cash flow, ROI, appreciation, etc., the achieve that vision. The more specific, the better!
4. What rate of property acquisition will help me achieve that goal?
Every investor must scale their portfolio. Once goals are established, your advisor should be about to plot out an appropriate timeline for acquiring more properties. This gives you another benchmark to move towards and a clear idea of what you need to be doing to stay on track.
5. What can I do to fortify my portfolio against market risk?
The market is constantly changing, and those changes bring about new opportunities, risks, and challenges. Talk to your advisor about expectations in the coming year. How will a recession (or other market climate) impact your strategy moving forward? How can you protect all that you’ve been working for?
6. Am I taking on too much risk?
Your advisor is there to help you make the best possible investment decisions based not only on your goals, but on your risk tolerance as well. Anytime something changes, you should reevaluate the risk your portfolio is exposed to.
7. How can I minimize capital gains?
Your advisor should also be able to help you with tax-saving strategies. For example, they may recommend you prepare to execute a 1031 Exchange during your next portfolio shake-up. This defers capital gains taxes on the property. And that’s not the only way to save money and maximize investment revenue! Don’t miss out on opportunities here – seek counsel from your advisor.
8. How can I pivot my strategy in the year ahead?
As we go into another year of vacillating market trends, now is the time to convene with your advisor. You’ll want to be on the same page with your expectations (for the year, the economy, and your portfolio), as well as your action plan. This is especially true now, as we expect some significant economic happenings to occur in light of a recession—or lack of one! What do you need to do to stay focused and on target?
Your advisor is there to maximize your potential as an investor. Utilize their expertise!
Our team of portfolio advisors are some of the best in the business.
Find out how they can help you achieve your financial goals!
