There is a lot of information for landlords on how to maximise their cash flow and on how to generate additional income. At Bluestone Properties, we are more than happy to provide you with assistance in this area.
However, landlords need to consider the importance of cash flow management too. Even if you are bringing in more money, if you aren’t managing the flow of money in and out, you might place yourself and your business at risk.
Therefore, we are happy to provide a selection of cash flow management tips for landlords.
One of the basic principles of cash flow management is to have money come in before it is scheduled to be paid out. Therefore, you should review the dates of your major bills, including your mortgage payment. If you can schedule the amount to fall a few days after the date you expect to receive your rental income, you create a buffer which helps reduce the impact of problems in receiving rental payment.
In this way, even if a rental fee payment comes in a day or two later, you aren’t placing your ability to manage your mortgage payments at risk. A simple step like this makes it far more likely you will have sufficient funds to meet all expected payments.
While some landlords like to collect rental payments themselves, by doing so, they are placing themselves and their business at risk. Landlords should consider the benefits of using an automated system to collect rental income.
Doing so reduces the risk of personal issues or problems preventing a landlord from collecting the monthly rental fee from a tenant.
Anyone landlord who insists on collecting rental fees should get their tenant to sign up to a Direct Debit agreement. Another solution is to use the services of a local agent who will manage your rental fees on your behalf, which provides landlords with one less thing to worry about.
If there is a problem at a rental property, it is best to resolve it as quickly as possible. By addressing the problem quickly, you ensure tenants are happy. A happy tenant is more likely to stay in your rental property, which minimises the risk of void periods, and this stabilises expected rental income.
It is also fair to say in many cases, the sooner a repair or maintenance issue is resolved, the cheaper it is to do so. Many landlords have held off from carrying out repair work only to find the problem has exacerbated. In turn, this leaves the tenant unhappy, more likely to leave, and costs more to repair. Also, the condition and value of the rental property might be compromised.
Therefore, landlords are encouraged to set aside money each month to put towards a repair and maintenance fund. When an issue arises, this money allows landlords to organise repairs, and hopefully save money in the long-term.
Some fast cash-flow maintenance tips to consider include:
· Conduct inspections regularly – Your tenant is entitled to privacy, but by arranging regular visits (with sufficient notice), you can ensure the rental property is well maintained
· If you have a portfolio of rental property, try to stagger payment dates, and lease expiration dates – while having these dates grouped together can see you bring in a lot of money when things are going well, in tougher times, having these dates grouped together exacerbates the problem
· Review your contracts and mortgage payment – you might be able to lower your payments, or reschedule payments in a more productive manner
We offer a range of letting services to landlords in Tooting, including tailored options which ensure you receive the best support at all times. If you would like to arrange an appointment to help you negotiate the local buy-to-let market, please contact Bluestone Properties today by calling us on 0208 355 3405 or emailing us at firstname.lastname@example.org.