You will find a lot of online advice regarding improving your cash flow as a landlord, and of course, at Stones Residential, we are more than happy to advise you on these matters. However, landlords must not overlook the importance of managing their cash flow, particularly during these challenging times.
If you need assistance in making the most of your rental income, please consider these cash flow management tips:
Review the date of your mortgage payment and change it if necessary
When it comes to managing cash flow, the idea is to have money coming in before you have to pay money out. Therefore, it makes sense to review the date of your mortgage payment. If you can move this payment date to a few days after the day you receive rental income, you will create a buffer for yourself.
Even if the rental payment is late by a day or two, by positioning your mortgage payment a few days after you are due to receive income, you minimise the chances of your account having insufficient funds to make the payment.
Ensure debt is collected via Direct Debit
If you are a landlord who still collects rent yourself, you are placing yourself and your business at risk. It is far better to create an automated system, as this reduces the likelihood of personal issues or problems preventing you from collecting or a tenant from paying.
If you insist on collecting rental payments, get your tenant to sign up for a Direct Debit agreement. Alternatively, call on the services of a local agent who will complete this task for you automatically, giving yourself one less thing to worry about.
Respond to maintenance issues quickly
The sooner you deal with a repair or maintenance issue, the better; and this is the case for many reasons. By resolving problems quickly, you keep tenants happy. This will hopefully minimise the likelihood of void periods, which creates consistency in generating income.
Also, many landlords have found, the sooner a problem is resolved, the cheaper it is to manage. Too many landlords put off repair work only to find the problem intensifies, resulting in a more significant repair process, which costs more money.
If you have the funds to do so, place money aside each money to cover you in the event of repair and maintenance work. Then, when problems arise, you can resolve the matter quickly, saving money in the long-term, and pleasing your tenant.
There is also a lot to be said for being prepared, and producing accounts and statements helps you remain in complete control of your finances. As part of the managed service offered by Stones Residential, we prepare monthly accounts and annual statements for landlords, helping you better manage your business activities.
Some quick cash-flow maintenance tips include:
- If you have a portfolio of rental property, try to stagger payment dates, and lease expiration dates – while having these dates grouped together can see you bring in a lot of money when things are going well, in tougher times, having these dates grouped together exacerbates the problem
- Conduct inspections regularly – Your tenant is entitled to privacy, but by arranging regular visits (with sufficient notice), you can ensure the rental property is well maintained
- Review your contracts and mortgage payment – you might be able to lower your payments, or reschedule payments in a more productive manner
Stones Residential prides itself on offering the best standard of service local landlords, and we work hard to manage your property effectively. If you would like to arrange an appointment or get more details on how we can help you sell your home, contact us today online or by calling us on 020 8954 0045.