As I identified in my blog on 3rd July, the number one issue now facing landlords is cash flow. It is essential that as landlords we try and keep each of our properties in positive cash flow where ever possible.
Ask yourself “how much money am I making from my portfolio?” What does this break down into with regards to individual properties?
Now ask yourself “how much money am I losing?” Hopefully the answer to this last question is NONE!
But what if you find you’re losing money? What simple steps can you take to eliminate this loss?
One of the ways to achieve this is to start scrutinising all the costs that you are incurring for each of the properties in your property business.
Proper property housekeeping is a great way of realising where you could be reducing your expenditure and increasing your cash flow.
Start scrutinising all of your income and expenditure
Begin by drawing up a profit and loss sheet relating to your portfolio, keeping a record of exactly what you are paying out and how much money is coming in from your tenants!
It only takes a few minutes each week and once you get in to the habit of doing it, you will quickly identify any cash flow problems and act to rectify them.
The key thing here is to make sure that you are keeping your properties’ cash flow positive. If there is negative cash flow, think about the costs and whether they are necessary. Think: do I really need to be incurring that cost?
If possible, do away with unnecessary costs!
REMEMBER: don’t just accept negative cash flow. Do everything you can to minimise costs and boost your cash flow.
Our property management software solutions will automatically show you how much money you are making or losing from your property business.
To take a quick look at a simple cash flow graph
To take a look at a sample profit and loss report
