In the simplest words possible, your cash flow is the income after relieving yourself of all your business expenses. Needless to say, this is the amount of money that you can utilize to further expand your business.
The next thing to do is boost the flow of income wherein you aren’t just breaking even after expenses, moreover, you can calculate the increase in your return on investment (ROI).
Here are some of the best tips to ensure that your cash flow isn’t a stagnant entity but more of a flowing river of profit.
#1 Refinance Your Debt or Property
Refinancing is a concept wherein you are adding value to your property. One of the fastest ways to generate a flow in your profit is through this concept, may it be through loans or home improvements.
If you have a loan that will be settled in five years on a property, speak to your lender about refinancing that loan to ten, twenty, or more years. This will guarantee a return, though smaller than expected once the debt is paid.
Properties on the other hand that are being rented can be improved and refinanced in a manner wherein the rent is raised due to such improvement. The same concept applies to flip houses and selling them at a higher price.
#2 Diminish Your Costs
One of the reasons why the cash flow you are currently experiencing in the real estate industry is slow and stagnant is due to your expenses. There will be moments wherein you would realize that your expenses exceed your needs therefore you are losing money instead of earning it.
Cut down on these expenses so that by the time you have computed the deductions, you would notice a slight increase in your profit. The more you manage these expenses, of course, will guarantee a higher return.
#3 Shed Utilities If Possible
Another factor that can affect expenses and diminishing or hinder your cash flow is paying utilities on your end. If you are having the property rented out, make your tenants pay for utilities. This is because the person in control of whether or not utilities are being abused is in the hands of the person paying them.
Your cash flow will increase in returns as long as the expense in the aforementioned paragraph is within a controlled environment.
#4 Utilize and Maximize Local Rebates
With properties that go through renovations and remodeling, make sure that you take advantage of rebates that come from utilities. Your contractor can assure that they are up to date with US laws to get rebate focused renovations.
These can impact your real estate cash flow in three ways. You would pay less for repairs, you added equity for the future, and you also minimize your expenses should the utilities break in the future.
Just remember that the cash flow will also depend on the property being rented and or renovated before their sale. These key factors are just reminders of how you can slowly maximize what is within your reach.
There may be methods that would suit your style and or business, however, it will ultimately depend on the property being used.
Maximize your cash flow by means that you deem necessary and the returns will progressively run through your stream.
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Disclaimer: The blog articles are intended for educational and informational purposes only. Nothing in the content is intended as legal or financial advice.