While initially your property portfolio will need a lot of attention and management, the ultimate goal is a passive income where the cash flow is able to support itself.
To fund an investment that constantly loses cash, e.g costs are more than your income, is obviously not sustainable and is simply a losing strategy any way you look at it.
Growing your property portfolio is appealing, however, guaranteeing it’s sustainability so that it can look after itself, in the long run, should be your first point of action.
We’ve put together the best ideas around the office on way’s that you can increase the cashflow from your investment to make it a more promising enterprise as well as a few methods to steer clear of.
Ways You Should Go About Growing Your Profits
- Be Distinct -e.g. solar stands out from the crowd. Put a lot of research study into recurring costs and this might allow you to charge more.
- Raise the Rent – keep in mind the marketplace chooses the rate so timing is the key here.
- Long Term Leasing With Routine Rent Increases – keep your renter with small incremental increases. Having a property manager who excels at maintaining quality relationships is priceless here.
- Renovate or Refurbish – you are always competing with other homeowners so keep your property looking as attractive as possible. If your kitchen area and bathroom are 5+ years’ old, it could be time to take a look at options.
- Examine Your Expenses Annually – evaluate expenses, especially insurance and interest rates once a year.
- Have an Excellent Property Manager – employ someone who runs your portfolio like a business not just a job.
- Pay Down Your Debt – This is a must in a calculated investment strategy
Ways You Shouldn’t Go About Growing Profits
- Rent Out Individual Rooms – Great concept on paper but not in reality. You need to run your property like a business not a job.
- Furnish – Yes this can bring you in a little extra income but it dramatically reduces your selection pool for potential tenants.
- Allowing Short Term Leases – You want to eliminate vacancies in your property wherever possible.
The goal here is to make your properties self-sufficient cash flow machines. Through the power of well-thought-out strategy and annual reviews you will have yourself a strong vehicle for passive income generation.