Owning a San Antonio rental property is lucrative
The cash flow of your property can either be positive or negative based on the strategies you utilize. Investing in real estate is not a guarantee that you will make your goal income. But the methods you deploy in managing your property can fetch you more money. One of the best methods is hiring a local property management company. The right property manager has the knowledge and skills to help you manage your rental property to get more money out of it.
When your cash flow is negative, it means that you are running at a loss. That could be because the income you are generating is not enough to cover property management. If your rental property has a positive cash flow, then you are generating enough income to cover contingencies and some income is remaining.
However, a positive cash flow does not necessarily mean that you are gaining enough income. Your aim as a landlord should be to increase your cash flow to the extent that the margins become wider while you have less stress and fewer risks.
In this article, we will explain 7 ways that will help you to boost your rental property cash flow.
1. Reduce your expenses
When your expenses are too much, they consume most of your rental income, and your cash flow reduces. But if you reduce the expenses, it boosts your cash flow. There are several ways to reduce your expenditures. We recommend that you hire a good property manager. If you have several properties, you can make use of one company for all of them.
Employ the services of a professional accountant and a real estate tax attorney. They will help you to save money from taxes. Consider the possibility of working from home if you are paying for office space. Reduce maintenance costs and also consider energy-saving utilities. All these and more will help you to reduce your expenses.
2. Increase rents
Increasing your rent is one of the easiest ways to increase rental property cash flow. But that is only possible if your rent has been stable for a long time. If other expenses increase to consuming your rental income, the best way is to pass it down to your tenants by raising the rents.
However, if your property is not providing enough value to the tenants, it will be unwise to increase the rent. Your rental home should be of high quality. In that way, you can increase the rents without complaints from your tenants.
When you plan to increase the rent, do it under your local laws. In some localities, you can only increase the rent once every 365 days. There may be a limit to the amount you can add. Also, you have to give at least 3 to 6 months’ notice. Ensure that you get the details as it concerns your environment.
3. Deposit a larger down payment
When you make a larger down payment, your monthly mortgage rate will be minimal. But if you pay a smaller down payment, your mortgage will be higher, and there will be several charges.
To save money and boost your cash flow, you need to reduce your mortgage expenses by putting up a larger down payment.
4. Add income from other sources
Do not rely on rental income alone. If you are creative enough, you will be able to use your rental property to generate more earnings. There are several ways you can generate income. You can upsell storage, parking, laundry, cable internet service, washer, dryer, and any other service you provide within your rental property.
5. Maximize local rebates
Several rebates and tax credits exist for real estate investors who remodel their homes to improve energy savings. Common renovations that attract these rebates include furnaces, water heaters, doors, windows, and thermostats.
Before you engage in these remodels, have a plan with your contractor and keep all the paperwork. The benefits here are enormous. It reduces your utility bills, lessens repair costs, and adds equity for the future.
6. Reduce tenant turnover
High tenant turnover incurs several fees and expenses. Also, the vacancy period can increase, and you may rent your apartment to bad tenants. All these reduce your cash flow. To decrease tenant turnover and improve your cash flow, you need to be accommodative, responsive, and flexible. You also need to maintain your property in decent condition. And ensure that you are selective when choosing tenants.
7. Refinance your mortgage
Refinancing your mortgage helps to lower your monthly payments and reserve more cash for you. Refinancing involves extending the repayment term and reducing your monthly mortgage fees.
In a nutshell:
Owning a rental property involves several expenses. If you are not careful, you may not have enough income after settling the expenditures. However, deploying the right strategies will help you to improve your cash flow.
At Real Property Management Campanas, we guarantee to maximize the cash flow on your rental property. Learn more about our methods on the website, or contact us online today!