Article by Jeffrey Taylor
Would you like to increase your rental profits this year? Do you really? At the upcoming expo, I will share many cash flow building strategies. But, wait a minute! I need to warn you, many of you will NOT benefit from the ideas. And many others of you will benefit greatly.
How is it possible that some will benefit and some won’t benefit when everybody is hearing the same thing?
Listen to me carefully, please!! Some of you will not benefit simply because you are not ready or looking for any new cash flow ideas that you can immediately implement in your rental business.
Most landlords have not really decided (gotten serious) about wanting more rental profits. I want you to be honest with yourself for a moment. Are you making the following fundamental business mistake made by most business owners and especially landlords?
You have no specific objective for increasing your cash flow!
For example, when I first started out as a rental owner, over 30 years ago, I was happy to simply break even on my cash flow and as long as there were no tenant problems I was happy. The idea of actually increasing the cash flow during the year was not something I even considered. I quickly learned the hard way that unexpected expenses or vacancies could occur, and without any increase in my income each year, which would serve as a cash flow “buffer”,
I was in deep cash flow trouble.
Before the end of my first year of investing, I realized I needed to work to increase my annual cash flow each year by at least a couple of hundred dollars (after expenses) for each rental.
Within 5 years, the objective was to increase the annual income by at least several hundred dollars. Now, my objective is to increase the annual income by at least $1,000 on each property or unit. That’s why I constantly search out and test cash flow strategies because I have a specific income-increase objective that I aim to reach each year.
Let me say it another way, if I had no objective to increase income, it wouldn’t matter what strategies I hear about because whatever income I’m currently receiving is okay.
And, that’s how most owners are. We’re busy doing our jobs, involved with family, community, clubs, church, etc. and, as long as the “rentals” are doing okay and not giving us any headaches, we give little thought to increasing our net income. In fact, for most landlords, the only time we really give our rentals much thought is when rent is past due, when a resident has a problem or when property is vacant.
Does that sound anything like when you think of your rentals? You know I’m telling the truth. You’re happy simply if there are “no” problems. The idea of actually doing something to increase rental profits normally does not enter your mind.
Unfortunately, not having a higher cash-flow objective is a very costly business mistake. I want to challenge you not to make this big “profit killer” mistake.
Are you ready to get serious and work to increase rental profits? Really? Well, make sure you attend my presentation at the RPOA’s conference in February!