How to increase Cash Flow

Real Estate is usually all about the long term perspective and will be the most beneficial after it is paid off.  However, the monthly cash flow is something that will benefit the investor right now.  Does your property have a positive monthly cash flow?  If not this could be weighing down on your wallet and causing more problems before it can help you in the long term.   Do you have a small positive cash flow but does not cover the repairs or larger yearly expenses?  It may be possible to raise the cash flow by doing a few simple things.  First, see if it is possible to raise the monthly rent amount on your property.  Check with local companies to see what the going rate is for a comparable property.  When tenants move out or when their lease is over you can raise the rents to market value.  The rent amounts can change from year to year and if you are not paying attention you may not realize the average rent is much higher in your area. 

Check to see if you can make any improvements in the unit to appeal to more potential tenants and at a higher price.  If you can add fresh paint, new flooring or new appliances you may be able to increase the rent amount by a lot.  

Another great way to increase the cash flow is raise your rent as soon as a tenant moves out and do a better job advertising the unit.  Hang up flyers in the local employment locations, add great pictures and enticing words in the online add and definitely hang an easy to read yard sign.  If you increase the advertising you increase the chances of finding a great tenant that does not mind paying your new higher rent price.  If you have a 5 unit building and can slowly raise all the rents by 100 dollars a month, this can add up to an extra 6,000 dollars each year in extra cash flow. 

Now that you have raised all of your rents to the appropriate market average you can now focus on decreasing your monthly expenses.  If you pay for any utilities you will first want to find any way possible to minimize these expenses. 

If possible, try to have the electric separated and have each tenant pay for their own electric service.  If you pay for the water and sewer bill, it is possible to greatly reduce the monthly expenses by installing cheap water saving items such as water saving shower heads, faucet aerators and lowering the toilet bowl water level.  Usually the water bill is directly related to the sewer bill so you will get double return on your money by cutting back on water usage.  Do you best to look for any way of cutting expenses and raising rent.