Positive Cash Flow from your Tampa Investment Property
Our topic for the next few blogs will be maximizing real estate cash flow from your Tampa Investment Property. This is part one of three parts, where we will discuss the things you can do operationally. In Part two, we will talk about financial moves you can make and in our third part, we’ll discuss which improvements are most helpful to landlords.
If you are a real estate investor in Florida, you may have noticed that your cash flow is getting squeezed. On the one side, you have taxes and insurance increasing and on the other side, real incomes have not been going up at all for your renters in the state, so it’s hard for you to increase the rent in an effort to offset these additional expenses. Plus, there are a lot of new institutional investors who have come to town and are offering their properties for rentals. New apartment complexes are being built throughout Florida and in the Tampa Bay area, which means there is a lot of competition for renters. The market can feel stagnant for real estate investors right now. There is also a new federal tax on investment income that impacts landlords, so let’s discuss what you can do operationally.
The most important thing to do is to minimize your vacancies.
It’s extremely helpful to price the property right, advertise it properly and get a good renter into the home. Next, if you have good tenants in your property, do whatever you can to keep them. Treat your renters right, which means with respect and responsiveness. The number one reason tenants leave is because they wait too long for maintenance issues to be addressed. Pay attention to their concerns and you’ll avoid losing good tenants and finding yourself with a vacant home.
Finally, control the cost of your repairs.
If you are always making expensive maintenance calls to the rental home, the expense can get out of control. At Hoffman Realty, we have a tiered approach for maintenance. When tenants report a maintenance issue, they talk to a property manager first. The property manager tries to troubleshoot the problem over the phone. They’ll ask if a filter needs to be changed or if a breaker might have been tripped. If the phone call doesn’t resolve the issue, we move onto the next tier, which is to have a handyman look at the problem. This is an effective cost saver because it’s much cheaper to have your handyman change a wax ring on the toilet for $45 than it is to have a licensed plumber do the job for $145. If the problem is more complex, we’ll call the specialized vendor for help, which is our third maintenance tier.
We also ask all our vendors to report the cause of the problem. This protects our property owners because if the air conditioner doesn’t work because a filter was clogged or a toilet is backed up because someone flushed baby wipes, we bill the charge back to the tenant and it’s not a landlord expense.
If you have any questions about managing the operations of your rental home to maximize cash flow, please contact us or give us a call if we can answer any questions at (813) 875-7474.