Recent Buying Selling Lifestyle Investment Cash-Flow Property Management Rent Tenant
Recent Buying Selling Lifestyle Investment Cash-Flow Property Management Rent Tenant
Investment Cash-Flow Property Management

Positive Cash Flow Strategy: Using Rental Offers Over to Improve Property Investor’s Rental Income

11-Oct-2017
Real Estate investing has many advantages over other kinds of investments which has led to it becoming one of the most popular ways in which Australians are building towards a better financial future for themselves and their families. One striking feature of property investing that has cemented its place as one of the most popular types of investment vehicles is that property not only can appreciate in value but the real estate investor can also draw an income stream from their investment.

Positive Cash Flow Income

Some property investors are interested in property investing primarily because of the rise in their property’s capital value. Beyond this type of investor, who is interested mainly in Capital Growth, other investors are interested in the income stream, or yield, that an investment property can generate.

When the investor’s focus is on generating a steady income stream from their real estate portfolio, it becomes important that a property is Cash Flow Positive. When the rental income is maximised while the costs associated with owning an investment property are minimised, the property is able to generate the highest possible positive cash flow.

Strategies for Generating Positive Cash Flow

There are a few steps property investors can take to help their real estate investments become positive cash flow investments. Scheduling maintenance ahead of time so you don’t face a lot of maintenance bills landing at the same time is one cost-management tactic that you could use. It is also good to try and position your property in the market so it can achieve the highest possible rental income.

Jessica Van Aswegen is a Property Manager with 1on1 Property. In Jessica’s 8 years of Property Management, she has witnessed many of the highs and lows that property investors experience. One strategy Jessica has recently seen investors have success with is ‘Offers Over’ rental listings. This is a strategy which can help real estate investors improve their property’s cash flow.

Using ‘Offers Over’ to Help Improve Your Property’s Income

“Initially, we like to do a lot of market research on the property and the local rental market to find out what the likely price range of similar properties available for rent will be, so we know what the competition for tenants is like.”

One of the biggest concerns for real estate investors is having their investment properties untenanted, leaving them without an income stream for a period of time. Jessica says using ‘Offers Over’ as a strategy can help to eliminate this concern.

“What we like to do is advertise the property at a price which is slightly under or at the base of price range expectations. This helps us to ensure, first of all, that we can have tenants in the property quicker than anyone else.”

Often what can happen, says Jessica, is that a property is advertised at the highest end of the price range. Normally, if tenants have not been found quickly, the process is to then work backward and reduce the property’s rental price until it is filled. ‘Offers Over’, however, works in reverse to this and attracts more candidates to work with.

“We find by advertising properties at a lower price we will have a lot more interest from people, giving us a bigger pool of possible tenants to work with. This enables us to not only rent the property quicker, but we also can make sure we are placing good quality tenants in the property, which is more beneficial for property investors in the long-term.”

In many cases, people will come to an inspection and after looking over the property will find that it is of higher quality than they were expecting. This is where an ‘Offers Over’ campaign can be very useful, says Jessica, because people have usually seen all kinds of properties and they won’t let a good property go without competing for it.

“When people come to inspect a property and see that it is good they will try and offer more than the ‘Offers Over’ base price, helping us to let the property on behalf of our landlord for a higher amount than what they were hoping to get at a minimum.”

Careful planning and research are needed before attempting an ‘Offers Over’ strategy. The payoff for the real estate investor, however, can be significant over the lifetime of the property investor’s ownership. For the real estate investor who is focused on generating positive cash flow income from their investments, using an ‘Offers Over’ strategy to improve a property’s income stream is an option they should discuss with their property manager.

Are you a property investor hoping to generate a positive cash flow income from your property? Speak to one of 1on1 Property’s expert Property Managers today about how they can help you achieve more from your property. Call us on 02 4014 1900.

Keep Reading

Positive Cash Flow Strategy: Using Rental Offers Over to Improve Property Investor’s Rental Income

Real Estate investing has many advantages over other kinds of investments which is why it is so popular. Property Manager, Jessica Van Aswegen, talks about one strategy 1on1 Property is successfully using to help investors generate positive cash flow. Read More

5 Real Estate Mistakes Property Investors Should Avoid

Australians have taken to property investing in growing numbers over the last decade. Avoiding these 5 common first-time investor mistakes, however, can help you make sure your experience lives up to the dream. Read More