As a real estate investor, it can often feel like the income on your properties is fixed and there's no way to increase cash flow without investing in more properties.
But that's only half the truth.
Follow our guide to learn how you can maximize the potential of your properties and get the most out of what you have.
Cash Flow and the Real Estate Investor
What is cash flow in real estate?
It boils down to a very simple equation. It's your total rental income less your expenses and overheads. Your goal is to turn your property investment into cash flow.
If you're wondering how to increase cash flow, know that you aren't alone. Increased cash flow means insurance against the future. It means more available capital to invest in new properties.
And in the end, it means a better quality of life for you and your loved ones.
Get Ahead of Maintenance Costs
Maintenance and renovation are expensive. Large-scale repairs might be rare, but they can reduce your cash flow for entire seasons.
But you're not entirely at the mercy of your HVAC unit, leaky pipes, or that suspicious tree that looks like if could fall on your roof at any moment.
Prevention is the best form of defense, and preventative maintenance ensures you're not going to be saddled with a nasty shock when you least expect it.
Keep Your Long-Term Tenants
Property tax, insurance, and mortgage payments won't wait around until you find a new tenant. An empty property is a property you're paying for out of pocket, month on month.
Long-term residents are who you want to have renting your properties. And to keep them, you need to keep them happy.
That means making sure any maintenance requests or complaints are addressed quickly.
And it also means avoiding increasing their rent by too much when their lease is up.
Charge a Pet Fee
If you don't allow pets already, consider doing so. Disallowing pets is already turning many prospective tenants onto other options - and pets aren't as bad as many real estate investors think, anyway.
Consider charging a pet rent (or fee) to allow your tenants to keep pets in your properties. If you're still worried about damages, then ask any pet lovers to set aside an extra pet damage deposit to cover any extra costs.
Offer Optional Revenue Streams
Most tenants need to store their extra stuff somewhere. And it's a great solution to the problem of how to generate cash flow in a pinch.
If you've got the space, consider renting out storage facilities as a package deal. Bike and car storage, garages, and basement storage are all options that add up.
And if you're renting out multiple properties in a complex, install a coin-operated washing machine and dryer. That will generate sizeable cash flow over time and appeal to tenants who rely on laundromats (particularly students).
Increase Rent
Ultimately, cash flow in real estate comes from rent. If you're able to increase it without losing tenants, it's your best bet for improving your cash flow.
Compare the rent cost with the rest of the market, or consider installing new amenities in a vacant property to improve the rent price.
Improve Your Cash Flow
Who knew being a real estate investor was so much hard work?
By staying a step ahead of unexpected expenses and getting the most out of the space you have, you can increase the cash flow from your properties, and you can do it now.
Contact us for more information about our property management services.
