3 Reasons Your Rental Is Not Cash-flowing



1 Miscalculated expenses

I'm looking for cash flow make sure that your expenses are calculated correctly make sure you don't miss things such as your vacancy the CAPEX bad collections and repairs Also make sure you account for property taxes and insurance sometimes those things are rolled into your loan but don't forget to account for them


2. Your expenses are too high

Examine your expenses, if you are a new investor call up the companies that service those expenses ie Water company, electric company, talk to the analyst there to see if your bill is in line with the local average. If they are not you may have some maintenance to do on your property that will cost money upfront but ultimately lead to savings over time. Also, shop your routine services around if you must, which can lead to unexpected savings as well.


3. You paid too much/ bad position


You see this happens a lot where The Debt Service that you must take on makes the deal too skinny as far as your monthly margins and less forgiving of variable expenses. For example, where were you supposed to make $200 a door you actually end up in the negatives because you have an expense that came up that you didn't account for.  I like to recommend my clients going into stronger positions like to 55-70% LTV, that way there is some margin in the event that  things popping up

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