Increasing Cash Flow on Rental Property

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Cash is King.  An investor should buy rental properties to increase cash flow and not for appreciation purposes. Cash flow is one of the most important things for a real estate investor. As an investor, you must ask yourselves, how much cash flow is needed on rental properties to reach your financial goals?

These are the 5 reasons that hinder you from increasing your cash flow

  1. A High-Priced Property

It is not wrong to buy a high-priced property as long as the numbers make sense. It is not fun to bleed money on a property that should be making you money instead.

If the money coming in from rent is lower than the mortgage you are paying, you are bleeding money. A negative cash flow can cause a lot of stress.

Know and understand your market. Study it hard.

  1. Spend for Maintenance

A clean and well-maintained property is important.

To keep your renters and avoid vacancies, properties should be properly maintained. Look for maintenance provider that does not charge premium rates and develop a professional relationship with them.

  1. Conservative Cash Flow Estimates

Hope for the best but always plan for the worst. If your maintenance cost ends up being more than what you expected, then it is better to plan for the worst-case scenario. Being conservative in your planning to cover some unexpected cost will still result in a positive cash flow.

  1. Desired Monthly Cash Flow

The more cash coming in the better. Investing a small amount of cash on a rental property can potentially provide you with a higher return.

A lot of things have been going up to such as taxes, utilities, insurance premiums and repair costs.  It is important that your rent is keeping up the pace of these rising costs.

  1. High Turn-Over

Tenant turnover is a cash flow killer.

To make sure you have tenants that stay with you for a long time means that you have to be attentive to their needs and requests. Keep the properties clean and well maintained.

 

Your decision to buy a property should depend on your goals, financial situation, and local market. Always consider the purchase price. Buying property below market value is a great way to start.

 

RJ Pepino is Co-owner of Columbus Turnkey Houses alongside David Payerchin licensed Realtor with ERA Real Solutions Realty. Together they have bought and sold over 300 homes since 2005.
They offer investors a full-service turnkey real estate solution. Call today for a free consultation 614-285-3600 if you are looking for Columbus cash flow properties, Columbus wholesale properties, Columbus investment properties, Columbus real estate, Columbus turnkey houses is your premier source for Columbus investment properties.

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