Investing in multi-family property can be incredibly lucrative or it can be incredibly risky. However it turns out for you depends on your ability to make smart investments, identify areas where you can lower expenses, and offer competitive market rates. While there are a million and one ways to increase cash flow, such as utilizing paid parking lots or upping rents, you have a few options available that are less obtrusive and will keep your property profitable for the long haul.
Look at Your Property Taxes
Depending on how your property was zoned and developed, it may be getting taxed more than it needs to be. What’s more, if your property hasn’t been appraised in years, it may be overvalued—and therefore being taxed more. It’s easy to assume that what you’re being charged in taxes is accurate, but checking in from time to time may reveal a few surprises that can save you a ton of money with each passing year.
Reevaluate Your Insurance
Insurance has consistently been a great deal for mutli-family properties. If you haven’t reevaluated your insurance recently, you should make doing so a priority. Coverage is at its most affordable rates ever, with price per door at an all time low. Additionally, if you have added properties to your portfolio, you may be able to receive an even more reduced price per door by bidding on your entire collection.
Analyze Utility Costs
If you’re continuously bearing the brunt of increasing utilizing costs, you and your property will keep bleeding money. If your municipality allows it, charging tenants half for utility bills can help keeps costs down. After all, they’re sharing the pain of the expenses—no more incredibly long showers or leaking faucets, and maybe the lights won’t be left on all day. To accurately charge your tenants their portion, you can employ sub-metering or apportioning. Again, make sure that this practice is legal in your area before instituting it. If it is, you may begin to actually break even, or actually make a small return, on utilities.
Sometimes an investment can begin to feel like a money pit, but in most cases there are ways to turn things around. By thinking innovatively and going back to the basics, like the strategies listed above, you can start increasing your cash flow in little to no time.