The pandemic has shown us how cash flow positions can change almost in an instant, and for reasons often outside of the control of Landlords themselves. Although it’s important to remember that cash flow isn’t always the same month to month, here are our tips for keeping it positive.
Landlord Cashflow Management
Prepare For Tenant Turnover
Every day a property is left empty is a day that your cash flow is decreasing so it’s essential to be prepared for tenant turnover periods. Prepare for when tenants leave by carrying out checks and improvements as soon as you can. You should also have a plan in place to fill vacancies as soon as possible, whether that’s investing in marketing or working with your letting agent.
Address Late Payments Straightaway
There are, of course, times when tenants just make a mistake, but you still need to handle a late payment asap. Missed rent is an immediate disruption to your cash flow and any hesitation in addressing this with your tenant could lead to long-term financial problems.
Retain Long Term Tenants
Keeping tenants at your properties for longer periods will help to improve your cash flow. Happy tenants tend to stay longer in properties, minimising void periods and ensuring fewer blips in cash flow. They are also more likely to care for your property thus reducing money spent on repairs through wear and tear.
Inspections and Maintenance
Undertaking regular, preventative maintenance at your property can help to lower any future costs and ultimately improve cash flow. Conduct inspections regularly as check-ups and little fixes will prevent bigger issues from occurring. Early maintenance will save you money and improve your bottom line.
Respond to Maintenance Issues Quickly
If your tenant does report an issue, it’s vital that you respond very quickly and deal with the problem. The sooner a repair or maintenance issue is dealt with, the better, for many reasons. By resolving problems quickly, you keep tenants happy and minimise the likelihood of void periods. Also, many landlords have found that the sooner a problem is resolved, the cheaper it is to manage. Don’t put off repair work as you may find the problem intensifies, resulting in a more significant repair process at a higher price.
Make Improvements Before You Let Out
Making small improvements to your property will allow you to charge more rent. Leaving renovations for a later date can lead to further expense as you’ll need to fix any tenant-created issues whilst also trying to undertake additional renovations.
A diligent, timed, well-documented record of your property’s interior and exterior condition will always help ensure any disputes are minimised and limit the impact on finances too.
Review the Date of Your Mortgage Payment
When it comes to managing cash flow, the idea is to have money coming in before you need to pay money out. Therefore, it makes sense to review the date of your mortgage payment. If you can move it 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.
Many landlords are currently finding that they can renegotiate mortgage terms for a lower rate. Check when your mortgage agreement ends and shop around for a better interest rate. If you have a repayment BTL mortgage it could also be an opportunity to release some equity for reinvestment.
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 Horizon Lets Fully Managed Service, landlords have full access to a full statement of all their payments, incomings and outgoings through their landlord portal, giving complete transparency at any time, helping them better manage their business.
Get in touch with us and see if we can help you manage your cashflow better:
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