Quick Ways to Improve Rental Property Cash Flow

Most people believe that the day they become a landlord is the day they stop working. They think that all you need to do is to invest in a property and that it’s smooth sailing from there. The money will arrive in your account without needing to lift a finger. 

In reality, a landlord has a lot of responsibilities and the property needs to be in tip-top shape, so it’s no wonder one would want to increase the cash flow. How can full-time landlords earn more from their rental properties? Here are a few suggestions for you to consider.

Raise the Rent

While this strategy will not make you popular with your tenants, raising the rent is the easiest way to increase cash flow. The key point here is not to raise it too much because a sudden change can cause tenants to leave in search of a more affordable place to live. 

While this is usually the main reason many landlords are afraid to increase rent, this scenario is not as common. Your tenants understand that the rent is your source of income. As long as the increase is reasonable and you give them enough notice, everything should be fine. Also, don’t forget to check the local laws because it’s not advisable to break any rent control laws. You may be subject to legal action if you do so. 

Consider Restructuring Your Loan

Like most people, chances are that you’ve invested your savings and may have taken out a loan to pay for your rental property. At times, when we see a good opportunity, for example, a house that is in good condition at an affordable price, we cannot hesitate or the moment will pass. This is why we sometimes end up with a loan that is not particularly favorable.

However, since the economy is in a constant state of flux, it comes as no surprise that you may be able to make a change to your loan. You may be surprised; if you negotiate with your bank, you may be able to get a better interest rate. This would decrease your expenses in the long run and your cash flow will be affected. Alternatively, you may take out a loan with another bank or institution that is far more favorable and use it to close off the first loan.

Keep the Rental in Good Shape

Although it might sound counterproductive, spending money on regular maintenance and taking care of smaller repairs is an excellent strategy to control your cash flow. Small issues have a tendency to grow into large and expensive repairs in the blink of an eye. For the sake of your budget, you need to take the maintenance of your property seriously.

Beyond regular maintenance, make sure that your tenants will act conscientiously towards the property, appliances and furniture. It’s paramount that they notify you instantly if they notice something is not right. This shouldn’t be too difficult to broker because it is beneficial for both parties.

Over to You

None of these strategies is difficult to apply – you just need to assess which one will work for in your favor. Make sure you think things through before raising the rent or taking out another loan. By carefully implementing one of these strategies, you will invigorate your rental’s cash flow.

Lilly Miller is a freelance writer, who focuses on interior design, well-being and sustainable living. She loves to experiment on daring new home decor trends and write about it as a regular contributor on Smooth Decorator. Settled in Sydney for the time being, Lilly shares home with two loving dogs and a gecko named Rodney. You can find her hanging out on Twitter.

*Contributions are solely guest opinions and don’t reflect the opinions of or are endorsed by WYL, our staff, clients or other interested parties.