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If you’re working in real estate, you must know that positive cash flow is part of the earnings you get after deducting all the expenses. From the mandatory expenses of taxes and insurance costs to the variable ones, including monthly payments and utility bills – a positive cash flow could be referred to as what you owe from your income after paying off all of them at the end of each month.
Since the income of a property portfolio is usually dependent on the rentals and rebilled charges, your cash flows have equal chances of being positive, negative, or even zero. While most property investors have just one objective attached, i.e., to generate money from the assets, there’s a major opportunity for you to make profits beyond the assets by maintaining positive cash flows every month. A positive cash flow can help you make more money out of the property portfolio and be a source of accumulating liquidity for continued investment and the expansion of your portfolio as well as profits over time.
This must sound exciting, but it simultaneously calls for great strategy and planning. And to help you understand that more, we’ve put together some of the best strategies for maintaining a positive cash flow from your property portfolio as a top financial advisor in Melbourne.
Dive deep to learn these amazing strategies!
Always Purchase at a Lower Price
While many property investors presume that the right time to make money is when they’re reselling a property, the truth is otherwise. Speculating how property prices will shoot up in the coming ten years is great. Still, we never know what will happen in the future, and the fact that the value of money will not be the same anymore should also be kept in mind.
While many new homes are for sale in Melbourne, it’s on you to pick the best ones. And, of course, the right time to make money is when buying a property, and you can achieve this by making the right negotiations and buying the property at a much lower price than what’s quoted. Yes, that’s how you can contribute towards a positive cash flow.
Rightly Negotiate the Terms of your Loan
Among all the expenses you might need to incur, loan payments are going to be at the top and the biggest ones. If you rightly understand and negotiate the terms of your loan instead of relying on what your creditors draft out, there could be a real chance that you save some major expenses attached. Elements, including the loan rate, insurance rate, early repayment penalties, application fee, etc., can be easily negotiated and save you a lot of hassle in the future. The less you’ll be spending on the monthly payments, the more positive would be the cash flows from your property portfolio.
Increase the Rent
While an unreasonable increase in the rent can cause repercussions such as vacant properties, raising your rent within the market-set boundaries is significant. However, you can only ask your rentals to pay more straight, but integrating strategies such as offering more comfort via small renovation work, decorating rooms with more detail, or installing modern equipment, etc., can work as catalysts.
If you also aim to achieve positive cash flows from your property portfolio, we have the finest investment advisors to help you through. As a leading provider of wealth management services in Melbourne, we ensure our clients are 100% satisfied and get the best of what they desire every time!