Profitability vs. Cash Flow

Profits vs. Cash FlowHow many properties do you have rented out?  Even if the answer is “1”, is it making the profit it ought to? If not, could it be that you’ve been making costly mistakes without even realizing it? The truth is, when you bite off more than you can chew, profit margins can suffer.

The profitability vs. cash flow question is one that we all have to tackle at some point in time.  The good news is, you’ve taken a big step in the right direction by diversifying with real estate investments.  But it is important to consider how this investment affects your profitability.

When you find that one, or many, of your properties aren’t turning an adequate profit, you need to ask yourself why.  Usually, there’s no single reason.  Instead, a series of issues generally explain why a property is bringing in less money.  Some of those reasons can include:

  1. Maintenance issues.
  2. Problems with rent collection.
  3. High number of vacancies.
  4. High costs for people / employees / tenant acquisition.
  5. Don’t have enough time devoted to reporting on and measuring important metrics.

If you discover that you’ve got a problem, you can either renew your focus by taking proactive measures on your own, or hire a professional to manage the properties for you.  The biggest cost to profitability in our industry is inefficiency and unnecessary waste of time and resources.

So if what you’re looking for is a way to improve your efficiency, let’s talk about technology.  There are products on the market today that leverage current tech to squeeze value from management.  These products do everything from manage your tenants via a back-end, to keep track of your leasing documents with automatic external backups, create detailed photo-reports for each move-in or move-out walk-through, process security deposit refunds, manage vendors, create online Portals for tenants to access resources without your input, and the list goes on.

Does it sound like a lot?  That’s because it is!  Being a dedicated and on-the-ball Property Manager is a lot harder than most people think.  If you’d prefer to turn over management of your Property to a professional, please consider us.  Learn more on our Owner Services page, or call (828) 712-9856 to speak with a Property Manager today!

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