HOW CAN LANDLORDS MAXIMISE CASH FLOW?

Landlord

When it comes to being a landlord, one of the key aspects of being a successful landlord is ensuring you maximise cash flow to generate income and cover contingencies. However, not all buy-to-let properties guarantee maximum cash flows.

 

But before we start, let us give you a short tour about Cash flow.

 

What is Cash Flow?

 

Cash flow is the money left after deducting all the expenses you have made for your rental property from your rental income such as mortgage, insurance, property taxes, fees, property management fee, vacancy fund, etc.

 

CASH FLOW = RENTAL INCOME – GROSS OPERATING COST

 

After all the deductions made here are the following results that you may have:

 

Positive Cash Flow

This means that you are making money from your buy-to-let property and the bigger the amount, the better.

 

Zero Cash Flow

This means you are just breaking even with your buy-to-let property

 

Negative Cash Flow

This means that you are losing money with your buy-to-let property and you need to re-evaluate your investment property.

 

As a landlord, you would like to maximise your cash flow. So how can landlords maximise cash flow?

 


Landlords can maximise cash flow by increasing rent
One of the simplest ways of increasing your cash flow is by increasing the amount of the rent. However, increasing the amount of rent can be challenging especially these days due to the pandemic. But if you are providing comfortable and safe buy-to-let properties that are well-maintained and still in line with the local letting market, then it is reasonable to increase the rent as your tenants will most likely understand it.

 

2.     Landlords can maximise cash flow by choosing the good tenant

Choosing good tenants and making sure that they are capable of paying the rent on time and do not destroy your buy-to-let property is very important and this requires hard work. You have to make sure to verify the necessary details to make sure that you are getting a good tenant.

 

3.     Landlords can maximise cash flow by maintaining the property well and making long-term repairs 

Many landlords find regular maintenance of the property burdensome. After all, who would want to call in vendors to fix things in every few months? But here’s the catch: the longer you delay regular maintenance, the more damage it can have and the larger the amount you will have to pay.

 

4.     Landlords can maximise cash flow by allowing pets

The UK is full of pet lovers. One of the services to increase your cash flow is allowing pets with a pet fee in your rental property. Yes, pets can cause damage and problems especially when they pee on your new carpet or chew the furniture you have provided. Yes, it can cost you. But if you are selective about your tenants and you include in the Lease Agreement detailed responsibilities of the tenant such as the cleanliness and pet damage, then it will be a great way to increase your cash flow.

 

5.     Landlords can maximise cash flow by reducing other expenses

Your biggest cost correlates to your financing. You should spend time researching your options and finding the best financing options. You should review your buy-to-let mortgage.

 


Bluestone Properties
Bluestone Properties is a letting agency in south London. If you are a landlord in south London and would like to know how we can help you, get in touch with Bluestone Properties at 0208 355 3405

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