Set Specific Cash Flow Objectives
|Would you like to increase your rental profits this year? Do you really? Here's a test question that will let me know if you are serious. How much more profit do you want from each rental property (or unit) you own? Did an exact figure come to your head? If not, then don't fool yourself. Your rental profits will NOT increase. In fact, you can stop reading now and watch TV, unless you are ready to get serious!|
At the November General Meeting, I will share many cash flow building strategies. But, wait a minute! I need to warn you, many of you will NOT benefit from the money making ideas. Many others of you, however, will benefit greatly. How is that possible that some will benefit and some won't benefit when everybody is hearing or reading the same thing?
Listen to me carefully, please!! Some of you will miss great money making/saving management ideas simply because you are not looking for any.
Let me say that again. Even though you are reading this issue right now and will attend the General Meeting, many of you are simply not looking for cash flow strategies that you can immediately implement in your rental business.
Most landlords have not really decided (gotten serious) about wanting more rental profits.
I want you to be honest with yourself for a moment. Are you making the following fundamental business mistake made by most business owners and especially landlords? The business mistake I'm referring to is that you don't know how much profit you want, or stated landlord to landlord,
You Have No Specific Cash Flow Objectives for Each Rental You Own
For example, when I first started out as a rental owner, almost 20 years ago, I was happy to simply break even on my cash flow. I quickly learned the hard way that unexpected expenses or vacancies could occur, and without any net profit or positive cash flow "buffer," I was in deep cash flow trouble.
Before the end of my first year of investing, I had a cash flow objective of at least one hundred dollars net profit (after expenses) for each rental.
Within 5 years, the objective increased to at least $200 net profit. Now, my objective is at least $300 net profit on each property or unit. That's why I constantly search out and test cash flow strategies (that I share with associations across the country more than any other landlording instructor) because I have a specific objective that I aim to reach or maintain.
Let me say it another way, if I had no cash-flow objective, it wouldn't matter what strategies I hear about because whatever income I'm currently receiving is okay. And, that's how most owners are. We're busy doing full-time jobs, involved with family, community, clubs, church, etc. and, as long as the "rentals" are doing okay and not giving us any headaches, we give little thought to them. In fact, for most landlords, the only time we really give our rentals much thought is when rent is due, when a resident has a problem or when property is vacant.
Does that sound anything like when you think of your rentals? You know I'm telling the truth. You're happy simply if there are "no" problems. The idea of actually doing something to increase rental profits normally does not enter your mind (except when this newsletter challenges you each month, which is why this subscription is so valuable to you). The problem with this scenario is that if you have no cash flow objectives to reach, you do not look for ways to get more income. Therefore, you don't do or try to do anything to increase cash flow.
Having no cash-flow objectives (which increase) is a costly business mistake. I want to challenge you now not to make this big "profit killer" mistake.
Are you ready to get serious and work to increase rental profits? Really?? Well, make sure you attend the upcoming General Meeting!! Before the meeting, I want you to do one real simple thing -- please, just do it! (You'll thank me when you see me in person). Decide on a goal or a specific dollar amount that you want to receive (above expenses) on each rental you own. During the meeting, be ready to get at least three specific strategies to reach the goal you establish. Then after the meeting, I want you to monitor your profits each month, and see whether you are reaching that goal. Start by making your goal at least $25 to $50 more monthly than you are currently receiving (per unit). If you do the strategies I suggest at the meeting, I guarantee you will reach your objective.
By the way, I'm assuming you keep and review accurate financial records so you can actually determine where you stand "financially" right now. If not, do not pass go and do not collect an "extra" $50. Stop, review and determine exactly how much net profit you are now receiving. Since this is the tax season, you should be able to pull your records together to determine current profits.
Once again, set a goal of $25 to $50 higher than current profits for each rental. Now is when your rental business can become exciting, because at the meeting your eyes will begin to "see" all kinds of cash flow business ideas, because you will be "ready" to see them. Plus, once you have a new monthly cash-flow objective you are trying to reach, you will be much more motivated to actually try the ideas I suggest. (Wow, what a unique thought.) And, by monitoring your net income each month, if you come up short, you can make minor adjustments to the strategy and maybe add one or two more strategies I will give to those of you who need "advanced" training. Therefore, attending the upcoming meeting and monthly monitoring of your net income will be vital steps to your future success.
I challenge you further, to set a time limit on your goal to reach your new cash flow objectives within 90 days after the seminar. And, if you use just a few of the ideas I will share with you, I promise again, you will reach your new cash-flow goals. But, it all starts with setting cash-flow goals. As I asked at the beginning of this article, if you indeed really want "more" profits from your rental business, what I have shared is the vital first step to obtaining more.
|Jeffrey E. Taylor, C.P.L. is CEO of Mr. Landlord, Inc., a national property management consulting firm - coaching over 50,000 landlords annually. He is the publisher of the Mr. Landlord Newsletter, the largest circulated real estate newsletter in the country, with over 10,000 monthly subscribers. Jeffrey Taylor has been interviewed on numerous radio talk shows and quoted in hundreds of publications, including The Wall Street Journal, Smart Money, and Personal Finance Magazine. Known to thousands as Mr. Landlord, Jeffrey Taylor is the author of a dozen publications, books, and reports on various aspects of rental property management. |
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