PROFIT SAVINGS TECHNIQUES FOR BETTER CASH FLOW AND LONG-TERM GAIN

Profit saving techniques for better cash flow

THIS IS A REPOST TAKEN FROM A SWFLREIA POST (SOUTHWEST FL REAL ESTATE INVESTMENT ASSOCIATION)

Management tips and profit saving techniques for better cash flow and better long term gain.

profit saving techniques for better cash flow

  • All rentals that have carpet flooring should have no pets!! (Long term investment property should not have carpet at all, they should have TILE flooring!)
  • Glass top stoves are the best. they last longer and have less parts to go bad.
  • Perform Quarterly Inspections  (check a/c filters, well equipment) You change/inspect the a/c filters while you are there.
  • When meeting with your prospective tenant check these things; the upkeep and condition of their car, and drive by if previous rental is local.
  • Prorate the second Month.
  • Make it as easy as possible to pay (envelopes, labels, electronic payment options).
  • Video tape/take pictures with your tenant in the pictures when you move them in.
  • Run back ground checks! You get what you inspect not what you expect. Do more than just call their references, employers, and previous/current landlords. Use the internet (Google/Facebook are your friends).
  • Be respectful and reasonable but do not be friends with your tenants.
  • Do not call, return missed calls, and/or see how things are going with your tenant.  Only respond to specific messages for for specific purposes.
  • Be realistic with your monthly rent ($50 more for an overpriced home can add months of vacancy).

Expenses over $300 are what kills your annualized returns.

 The most common expenses over $300 are;

  • Roof
  • Septic System
  • A/C
  • Well Equipment
  • Appliances

 

Budget these for replacement.  They will last longer if they are properly maintained

 

Rehab/maintenance costs

  • Tile verses carpet
  • Pool maintained by tenant or by pool company
  • A/C filters changed by owner/manager or tenants
  • Have tenants maintain well equipment verse company

 

Mistakes to avoid when investing in Real Estate

  • Do not estimate or use the opinion of someone else to determine market value. (Used recently sold comparables to determine value)
  • Never make a decision on impulse or emotion
  • Avoid investment property that is not separately metered (water or electric)
  • Septic vs. Sewer, Well equipment vs. City water.
  • Avoid fixer uppers outside of your expertise or have an expert (GC) with you
  • DISCLOSE, DISCLOSE, DISCLOSE (i.e. licensed realtor)
  • Find out about the financials, board membership, and rules and regulations when purchasing in a community
  • General contractor vs. jack of all trades… Never band aid a repair or rehab a property halfway…
  • Have either an exit strategy or long term plan for the investment (when you sale with the asset be purchased by another investor or an end user?)

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