How To Rely On Actual Data – Not “Feel” – When Analyzing The Success Of Your Rental Portfolio

By: Gregg Cohen, CEO

Long before our company ever sold a single investment property to a client, the 3 founders of the company (myself, Alex Sifakis, and Adam Rigel) purchased roughly 40 rental units for ourselves.  We believed in the same principles of success that our clients believe in now: creating consistent, dependable Returns on Investment (ROI) by investing in specific cash-flowing neighborhoods and surrounding yourself with the best teammates to handle all aspects of the investment. 

Determining ROI was always supremely important to us.  We, of course, would know exactly what our projected ROIs would be before we would purchase a rental property.  But at the end of every month as we were reviewing our books, we would constantly ask ourselves the same questions.   What is our actual ROI per property?  How could we identify winners and losers?  How can we analyze trends in the ROI performance of our properties to determine ways to improve our returns? 

Unfortunately, Quickbooks wasn’t built to determine our net rental income and divide it by our total amount invested per property.   We soon found that it was really difficult and time consuming to track all expenses including mortgage payments, taxes, insurance and maintenance in a separate platform.  As we sat in our financials meetings month after month, not one of us could give straight answers when it came to actual ROIs.

It all just seemed like a bunch of “feel” at that point to determine the success of our rental portfolio.  I “felt” that 123 Main Street was a good investment because it didn’t have a major repair last month and it wasn’t top of mind.  I “felt” that 222 Maple Lane was a terrible investment because the tenant just left and I had to replace the carpet. 

What I soon realized was that when you own more than a couple of properties, your “feel” on the success of your properties can be very misleading.  123 Main Street may not have had a big ticket item repair ever but maybe your income on the property was lower because it sat vacant an extra 2 months which caused you to miss your ROI expectations.  222 Maple Lane may have had a $1,500 carpet repair when the tenant left last month but for the previous two years the tenant paid the rent in full which allowed you to beat your ROI expectations. 

It quickly became a game of “what have you done for me lately” when it came to analyzing our rental portfolio.  We knew that short-sighted approach would ultimately lead to poor decisions being made in our investment decisions and ultimately, lower returns.  We knew we had to come up with a way to match our long-term mindset when it comes to owning rental properties.  And we knew other investors probably had similar issues when it came to understand the ROIs of their rental property portfolio as well.

So we did something about it.  Last year, our team built our own proprietary reporting tool called our “Client ROI Reports” to help our clients identify if we were exceeding expectations and to hold ourselves accountable.  Clients now can track actual ROIs per property, per year and for the lifetime of their investment.  The returns are even broken down into mortgage payments, taxes, insurance, and property management expenses per property, per year and for the lifetime of the investment.  And, much like you would analyze your stock portfolio, the “Client ROI Report” rolls up all of the ROIs for the individual properties into a total portfolio summary.

Now that we have this reporting feature, we can’t remember life in our office without it.  All of our conversations with our clients first start with a look at the “Client ROI Report.”  It provides an objective way to measure our performance for our clients.  It also helps clients maintain the long-term mindset which can be difficult when maintenance expenses come their way. 

I’d like to share the actual client ROIs for the portfolios of all of our clients as a whole.  From January of 2011 through January 2014, we had 129 clients who had purchased a total of 272 JWB turnkey rental properties.  They invested a total of $9,852,157 in down payments (not actual property values) and achieved an average lifetime ROI of 12.14%.  It is important to note that these ROIs do not include ANY property appreciation.



We are extremely proud of the returns we’ve achieved together with our clients.  Our team knows that these returns were achieved in an otherwise turbulent time due to a depressed housing market, huge swings in the stock market and unrest in the global economy.  We know that these 12% plus returns mean that our clients can retire sooner, send their kids to better schools, or maybe travel more often.   Thank you to all of our clients for putting your trust in our team and we look forward to meeting and exceeding our ROI expectations for many years to come.

If you are a potential client and would like to experience our “Client ROI Reports” first-hand, please contact our Account Executive, Canitha Raynor, at (904) 677-6777 or by email at Canitha@jwbcompanies.com.  She would be happy to set you up an appointment with a Sr. Account Manager.

Gregg Cohen is the CEO of JWB Real Estate Capital. JWB serves clients in 10 countries and 32 states who have invested in over 700 investment properties since 2006. In 2012, JWB was recognized as the #12 Fastest Growing Real Estate Company in the US by Inc. Magazine. To learn more about our team and our investments, please call (904) 677-6777.

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