At the halfway point of the year, a simple total wealth review tells you whether your rentals are actually building the net worth you bought them for.
Someone asked us recently about doing a mid-year portfolio review, and it stuck with us because it's one of the smartest questions a rental owner can ask. We'd just been talking about the same idea with a group of business leaders, so here's what we actually recommend you do.
We're at the midpoint of the year. June or July is the natural time to stop and review your portfolio, and how you look at it matters more than most owners realize.
Treat your rentals like a business. One of the main ways you make money in real estate is by running it like a business instead of an emotional attachment, and a mid-year review is one of the best ways to keep yourself in that mindset. The goal is to stay focused on the numbers, not the day-to-day noise.
Do a total wealth review, not just a property review. Don't only look at your rental properties. Pull everything together. Add up the cash in your bank accounts, add in any stocks you own, and then add the value of your rental properties. When you put the whole picture in one place, you start to see how your wealth is actually moving.
For the rental side, the number we care about is your equity, which is the value of the property minus what you still owe. There are a lot of ways to land on a value. You can call a Realtor, you can ask your property management company, but to keep it simple, we use what the county uses. In San Antonio, that's the Bexar Central Appraisal District, known as BCAD. You can look up the assessed value of your property there for free, subtract your loan balance, and you've got a clean, consistent number for what that property is worth to you right now.
"The owners who build real wealth treat the mid-year review like a business, not a list of things to worry about."
Once you've done that for each property, add it to your cash and stocks to create a single overall net worth figure. Then do it again at the end of the year. When you compare the two, here's what you're likely to see: home prices in San Antonio, outside of the last couple of years, have appreciated tremendously over the last 25 to 30 years.
So your property value climbs, your loan balance drops because your tenants are helping pay down that note, and your net worth grows from both directions at once. That's the moment the whole thing clicks. That's how you can actually see the money being made.
Now, here's what we would not do. Don't turn your mid-year review into a personal one. Don't make it about getting on top of the tenants, stewing over a broken window, or worrying about someone living in your property. Of course they are. They're walking on your carpet, opening and closing your doors, and yes, things are going to get worn. That's what a rental is. If you let that get under your skin, you get emotionally attached, you start wanting to sell, and you miss out on years of net worth growth.
While you're at it, this is also a good time to check in with your property management company and make sure everything's running smoothly.
Keep it about the net worth. Run the review like a business, watch your net worth grow, and let the properties do what they're built to do.
If you'd like help running your numbers or want to make sure your properties are set up to grow your net worth the right way, reach out. Call or text us in San Antonio at (210) 802-9959 or in Austin at (512) 708-3172, email us at info@peaceofmind.co, or visit www.sanantonioproperty.management.