Rental Properties - 10 Cash Flow Tips
What if you want better cash flow from your rental properties?
You can't just raise the rents arbitrarily. If tenants leave,
income goes down, not up. There are other ways, though,
including the ones listed below.
1. Install coin-operated washing machines. Even if you don't
have the money to do this yourself, you can find a company that
will do it for you, and share the income with you. 2. Rent extra
parking space. When I got tired of a renter's extra car, I just
started charging a weekly fee. Then I didn't mind so much.
3. Raise the rent. Okay, we did dismiss ARBITRARY rent hikes as
a cash-flow solution, but check on the rates for similar units.
Are you renting at below-market rates?
4. Rent storage sheds. Especially if your apartments are small,
your renters may need a place to store their things. Don't let
them spend their money elsewhere. Put a few sheds on the
property.
5. Enforce late fees. It is perfectly fair to have a fee for
late payment of rent, and guess what? Those who are chronically
late usually don't even mind - they just don't look at these
things the same way as others.
6. Offer improvements for rent increases. If it's worth $25
more monthly rent to a tenant, install that dishwasher. Even on
a credit card you'll pay less than that per month for it.
7. Install vending machines. If your rental properties are
large enough, others will do this for you for free, and give you
a share of the income. 8. Rent by the room. A four-bedroom house
might make more money if you include all the utilities and rent
by the bedroom. This has made a lot of fortunes for investors in
college towns. It does mean a lot of management, however.
9. Rent-to-own sale. Usually there's a non-refundable deposit,
and higher than market rents in these deals. When renters change
their minds, as they often do, you got the deposit and better
cash flow. This is great when poor cash flow makes you want to
sell. You either sell or get the better cash flow as you repeat
the process. 10. Reduce expenses. Every dollar of expense you
cut goes straight to the bottom line. List every expense of your
rental properties, and look at them one at a time. How can you
reduce them?