5 Easy Steps to Increase Your Cash Flow

Cash flow. These are two of the most important words to any investor. Your cash flow is the lifeblood of your real estate investment, and it’s one of the factors that can truly define whether or not an investment is successful. Increased cash flow means more money in your pocket, and it’s critical that you take the steps necessary to keep your revenues not just coming in, but also growing year after year. Here’s how you can do it:

Step 1. Make Your Property More Appealing...Without Going Over the Top

First things first. You want your property to shine, because that’s what going to attract tenants. Your rental needs to stand out among the competition, and to do that, you need to keep your place clean, fresh, and updated. Spend some time browsing current design trends (checking out newly built model homes online or in person is a good way to do this) and then apply some of these to your rental. There’s no need to go nuts with it - in fact, you don’t want to, as this will cost you more money - but things like paint colors and flooring types should be reflective of current trends, because that’s what’s going to appeal to high-quality tenants.

Step 2. Set Your Rent at the Right Price

Last week we posted an article about how and when to raise the rent. It deserves a mention here as well because increasing the rent (within reason, of course) is one of the easiest ways you can boost your cash flow. Your rent should be in line with comparable properties in your area, but if you can squeeze a little more out of it, why not do it? If you’ve taken the steps above to make your unit more appealing, you’ll likely find even more justification for a higher rate.

Step 3. Select Tenants Who are Willing to Pay More

When you’re going through the tenant selection process, watch for cues from your prospective renters to see which ones will be willing to pay more. Maybe there’s a couple who’s just in love with the neighborhood, or maybe the layout of your home is exactly what another tenant has been looking for. Whatever the case, there are tenants who are able and willing to pay more, and there are those who are not. Go for the first ones to improve your cash flow.

Step 4. Stay on Top of Property Maintenance

Do not ignore maintenance issues. I repeat, do not ignore maintenance issues. Doing this can result in problems going unnoticed, and hundreds or even thousands wasted in repairs that could have been prevented. Seriously, we can’t stress enough how important it is to be proactive with your property’s maintenance needs. Frequent inspections are a must, and taking care of minor issues before they become major problems can significantly affect your annual cash flow.

Step 5. Be a Stellar Landlord

Know what the biggest disruption to cash flow is? Vacancy. Why do properties become vacant? Well, for a lot of different reasons, some of which are out of your control. But, one thing that IS in your control and can have a direct correlation to vacancies, is how you rate as a landlord. Being an awesome landlord can be the deciding factor for many tenants. This means being approachable, available, communicative, understanding yet firm, organized, and responsive. Basically, treat your tenants how you would expect to be treated, and it can go a long way in keeping your place occupied by good people.