Small Actions Can Add Up to Big Savings for Cash Flow Investors
When you have a cash flow property, finding ways to save is of the utmost importance. Failing to make the most of opportunities to save money can eat into your profits quickly, especially if you have multiple properties. Here are some small, yet important ways you can save that are often overlooked by investors.
Keep Your Rental Property Well-maintained
As a landlord, it’s so important to nip small problems in the bud before they become hard-to-control, costly issues that affect the livability and quality of your property, or even the safety of your tenants. Do frequent inspections, develop a team of affordable and reliable professionals handy (such as house cleaners, handymen, appliance specialists, and gardeners), and address any tenant concerns promptly.
Here’s a shortlist of things to put on your to-do list:
- Routine exterminations. Ridding yourself of an infestation can be a costly hassle in more ways than one. Not only is an expensive problem to correct, but it can cost you potential and current clients, and give your property a bad reputation. Investing in routine pest and termite control could save you big in the long run.
- Exterior care. Keep decks, porches and balconies maintained and in good repair for safety and aesthetics. Keep any garden areas in good shape – curb appeal makes a powerful first impression. If the outside of your property doesn’t look maintained, potential renters may not even want to look inside.
- Schedule routine maintenance. AC, water heater, plumbing and electrical maintenance visits should occur regularly. Also, specific times should be scheduled annually to test smoke alarms, change air filters, and check the property for leaks and water damage.
Cross Your T’s and Dot Your I’s
Have any leases checked by an attorney, and make sure there are proper provisions for late rent, evictions and damages. Make sure that all property rules are clearly understood, and that all deposits are properly handled. Research tenants’ and landlords’ rights in your state, and make sure you abide by every law and document every communication with your tenants in writing. All of this will help you avoid fines and court fees, and help ensure that court cases are ruled in your favor.
Attend to risk management
Even with the best of intentions and the best preparations, landlords sometimes have to face costly problems like vacancies, lengthy eviction attempts, and property damage. Expecting the unexpected can help you mitigate the costs of unpleasant tenant situations.
There are two things you can do:
- Factor in costs of damages and vacancies to your rental rate and your overall business overhead costs. Set aside an account specifically for funding emergency rental situations, and contribute a set amount regularly.
- Consider investing in landlords’ insurance. Some insurance companies offer special coverage for landlords that’s specific to vacancies and damage. Some policies offer cash value, while others offer replacements for damaged items.