Signs of a Negative Cash Flow Rental

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The world of real estate investing is no cakewalk, even for the most experienced operators. There are unforeseen obstacles at every turn, and it’s not always easy to keep things in the black.

At Americas Housing Alliance, we’re here to lend a helping hand for all rental investors. We know how tough it can be to maintain a continuously positive cash flow in your investments – there are a few particular causes of negative cash flow within the rental sphere, in fact. Let’s look at few, and how you can remedy them to get your property out of the red.

Rent Under Market

Rent is going up around the country, and while you can’t get too over the top, you need to remain consistent with market trends. Costs like taxes, utilities, insurance and various maintenance considerations are all rising right along with rent, and you need to keep up. Check ads for the local area, searching specifically for comparable properties. Speak to other investors in the area, and call nearby For Rent signs to get a more complete picture of the market in your area.

High Turnover

Turning tenants over too quickly is a fast way to kill your cash flow. Stable tenants limit your vacancies and keep consistent income flowing – unreliable ones may be late with payments or may force you into longer vacancies. Be diligent during the screening process, and look for tenants with strong rental histories.

Maintenance Costs

The proper maintenance for your property is an absolute must, but you have to learn how to do it economically. Consistently paying too much for services can put you in a cash flow hole in a hurry, especially if you have multiple properties. By the same token, if you’re consistently underpaying for work, your tenants will become annoyed and may eventually leave. Work to develop good relationships with contractors and other service personnel, and get referrals if needed.

Spent Too Much

There’s a phrase in some corners of real estate: You make your money when you buy a property, not when you sell it. Paying too much for a property puts you behind right from the start, and it’s maybe the biggest reason investors see a negative cash flow. Study the market hard, and look at several other properties before you buy.

If you need more assistance, or to learn more about any of our investment property services, speak to the brokers at Americas Housing Alliance today.