September 05, 2012
5 Easy Ways to Improve Cash Flow
As a property manager, it goes without saying that you’d like to maximize your earning potential and increase cash flow. There are many ways to do this, ranging from simple procedural adjustments to taking on new profit centres. Here, we outline some very manageable changes you can implement to increase revenue and make your property as profitable as possible.
1.) Cross Sell Existing Services
By taking on new profit centres that don’t require high start-up costs or significant upkeep on your part, you can greatly increase your Net Operating Income (NOI), improving cash flow. For example, you could cross-sell services, such as renting out extra locker space or promoting a games room for party rentals. If you have coin-operated facilities, consider adding small vending machines.
2.) Add New Profit Centres
You could also capitalize on your existing assets by looking into other revenue streams, such as selling advertising in your parking area. Antenna leases are another great option; in prime urban areas, cellular companies have been known to pay as much as $10,000 to install a cell antenna on a property. As well, rooftop leasing for solar applications is picking up in popularity.
3.) Go Digital
A simple way to boost cash flow is to reduce the costs associated with printing and mailing invoices is to implement paperless property management. By going digital, you’ll be able to reach tenants more effectively and efficiently, while saving money and protecting the planet. All you’ll need are your tenants email addresses. If you haven’t already done so, you should request new tenants’ email addresses on application forms.
4.) Diversify Rent Payment Methods
As technology grows increasingly dominant, cheques are becoming an outdated form of payment. By adding additional rent payment methods for your tenants, such as credit card, Interac or automatic bank withdrawal, you not only provide a more secure means of payment, but you eliminate the lag-time of waiting for cheques to clear. Many banks offer electronic payment services. PayVista can also help you find online alternatives for rent payment. Through PayVista, you’ll have access to a system that’s easy and completely automated.
5.) Issue Rent Statements and Reminders
Many tenants fall short of rent deadlines simply because they procrastinate. By sending monthly rent statements 10 days before rent is due, tenants are far more likely to pay on time. For those who continue to be tardy, you can implement escalating rental reminders through your tenant portal. Electronic statements and reminders are preferable, as they keep paper costs and administration time to a minimum.
By implementing these simple changes and exploring new options to generate revenue through your property, you can quickly increase cash flow and improve profitability. As a property manager, your space should work for you.