News & Articles Ways to Maximise Cash Flow on Rented Properties
Ways to Maximise Cash Flow on Rented Properties
30 Sep 2015
If you’ve bought a house for the purpose of renting it out, you would definitely realize that getting the returns you expected is no easy feat as there are so many extra and hidden costs that can cause your profits to be cut dramatically. As such it is really important to take certain steps to ensure that the profits from your rental properties are kept consistent and you don’t spend all the money you receive on paying for maintenance costs and tax.
Here are some of the ways that you can maximise the profits from your rented properties:
1) Practice the 50% rule
The 50% rule is a simple guide on deciding how much rent you should charge on your property. Calculate the total maintenance costs you need to pay each month, like sinking funds and taxes. The rental you charge should be double the monthly costs of the property.
2) Choose a Suitable Tenant
When you allow a tenant to rent your property, make sure that they have a stable and consistent lifestyle and can commit to renting on a long term. Families are a good bet when it comes to long term and stable commitment.
3) Buy Newer Properties
The simple logic behind this is that newer properties will have less breakdowns and repairs that need to be taken care of and therefore will be less draining on your earnings.
4) Furnish Your Property
Properties that have either a semi-furnished or fully furnished status will fetch a higher rental rate than those that are empty and the tenant has to buy their own furniture.
5) Opt for a single Tenant
Rather than dividing up your property and renting out to multiple tenants, try to minimize the number of tenants, preferably to one family unit or one head tenant. In this way you don’t have to worry about whether all your tenants will pay you on time.
6) Buy Property below Market Rate
Less expensive property means you have less mortgage and less loans to settle, and therefore more income you can save or use for yourself. A good place to start would be the auction property market, where you can find property for less than its market price
7) Settle Loans as Quickly as Possible
Once mortgages and housing loans have been settled, then the bulk of the rental can be channelled either to your savings or expenditure.
8) Fix Faults in Your Property ASAP
Any maintenance problems and regular upkeeps that need to bed done should be carried out immediately and not wait until the problem becomes worse, as they tend to do over time.
(中文版请看这里:http://www.durianproperty.com.my/blog/article/1276)
Here are some of the ways that you can maximise the profits from your rented properties:
1) Practice the 50% rule
The 50% rule is a simple guide on deciding how much rent you should charge on your property. Calculate the total maintenance costs you need to pay each month, like sinking funds and taxes. The rental you charge should be double the monthly costs of the property.
2) Choose a Suitable Tenant
When you allow a tenant to rent your property, make sure that they have a stable and consistent lifestyle and can commit to renting on a long term. Families are a good bet when it comes to long term and stable commitment.
3) Buy Newer Properties
The simple logic behind this is that newer properties will have less breakdowns and repairs that need to be taken care of and therefore will be less draining on your earnings.
4) Furnish Your Property
Properties that have either a semi-furnished or fully furnished status will fetch a higher rental rate than those that are empty and the tenant has to buy their own furniture.
5) Opt for a single Tenant
Rather than dividing up your property and renting out to multiple tenants, try to minimize the number of tenants, preferably to one family unit or one head tenant. In this way you don’t have to worry about whether all your tenants will pay you on time.
6) Buy Property below Market Rate
Less expensive property means you have less mortgage and less loans to settle, and therefore more income you can save or use for yourself. A good place to start would be the auction property market, where you can find property for less than its market price
7) Settle Loans as Quickly as Possible
Once mortgages and housing loans have been settled, then the bulk of the rental can be channelled either to your savings or expenditure.
8) Fix Faults in Your Property ASAP
Any maintenance problems and regular upkeeps that need to bed done should be carried out immediately and not wait until the problem becomes worse, as they tend to do over time.
(中文版请看这里:http://www.durianproperty.com.my/blog/article/1276)
Source: DurianProperty.com