Can You Get Positive Cash Flow for your Tampa Investment Property in 2014
This is part two of our blog series on how to maximize positive cash flow for your investment property in Tampa. In our first blog, we talked about the operational things you can do. In this blog, we’ll discuss what you could be doing financially, and in our final blog we’ll talk about different improvements you can make for better cash flow.
It is getting harder to get good cash flow out of investment properties in Florida right now.
We have insurance rates going up and local and state taxes rising, and also increased competition for renters. If your operational systems are strong and efficient, maybe the issue in getting cash flow out of your property is your debt service. If that’s the case, there are three things you can potentially do.
You can consider refinancing.
If you have a federally insured mortgage, investors can actually refinance under the federal HARP program. Even if you are under water on your mortgage, some of these loan problems will allow you to refinance even if your loan to value is 200 percent. Investors can reduce their mortgage payment by $200 to $400 per month under a HARP refinance.
Another option is to pay off your mortgage completely.
This is an ideal option if you have the cash sitting around and it will certainly increase your cash flow right away. That cash is probably earning much less interest than the amount of interest you are paying on that mortgage every month. Pay off that mortgage if you can.
Perhaps you’d love nothing more than to pay off the mortgage on your investment property, but you don’t have all the cash you need to pay it off. Well, you can still pay down a good chunk of the principal. While making one or two large payments to your mortgage company may not increase your cash flow right away, because your payment will still be the same, you’ll be paying more towards the principal and less to the interest expense. You can look at this type of structure as a savings program, similar to a 401K or an IRA. Ultimately, the money will go to you in the end.
If you have any questions about the financial things you can do to manage your debt better and increase your cash flow, please contact us or give us a call if we can answer any questions at (813) 875-7474.