11:11 AM, 13th December 2010, About 11 years ago
Buy to let may be booming now – but many full time property investors are still feeling the pinch from the credit crisis.
Cash flow is the key to a successful business – not the value of a property portfolio.
Many businesses go to the wall because they are poorly managed and run out of cash.
So here are some tips to improve your cash flow:
Make sure rents are paid on time
Without harassing tenants or letting agents, keep a tight rein on credit control and do not let arrears build up. Sometimes a landlord can empathise with a tenant’s plight, but a good tenant is one who pays the rent on time.
Cut business outgoings
Slash all those little payments that add up to a lot of money each month. Look at every payment leaving the bank and ask if you really use that service
Don’t just renew, review
When contracts with letting agents and insurance companies are due, shop around and compare prices to see if you can find the same for cheaper.
Up your rents to competitive levels
Letting agents will often price a property to go rather than a competitive rent. It makes no difference to them – 10% of £500 and 10% of £525 is £2.50 to them but £25 to you.
Charge all your expenses to the business
Many landlords do not understand what they can charge to their business and miss increasing their expenses – if you make a rental profit, increasing your expenses slashes the tax you pay. More information on our partner accountancy firm here
If you’re handy, sell your services
If you are a competent handyman, look at offering your services to other landlords to earn an extra income. Good tradesmen are hard to find – test the water by running off some flyers, placing an ad in the local paper or asking your letting agent for referrals.
These are just a few suggestions for keeping the cash flowing – the point is take action now rather than later to make your property business a lean, mean cash generating machine.
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