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Ten Top Tips for landlords to keep cash flow in shape

An accountancy firm is giving landlords 10 top tips to keep their cash flow in a healthy condition. 

The Sheards Accountants firm says that the pandemic shows how cash flow positions can change almost in an instant, and for reasons often outside the control of landlords themselves. 

Here’s the firm’s advice:


1. Prepare For Tenant Turnover: Everyday property is left empty is a day that your cash flow is decreasing. So it’s essential to be prepared for tenant turnover periods. This means setting aside savings to cover any mortgage payments in months you are without a tenant. “You should also have a plan in place to fill vacancies as soon as possible, whether that’s investing in marketing or working with an estate agent” says Kevin Winterburn, director at Sheards Accountants. 

2. Handle Late Payments Immediately: “If you’re a new landlord, handling late or missed payments might be something you haven’t experienced before, but it’s important to handle these as quickly as possible. Missed rent payments are an immediate disruption to your cash flow. Any hold-ups in addressing these with your tenant could lead to long-term cash flow problems.”

3. Property Maintenance:  Undertaking regular, preventative maintenance at your property can help to lower any future costs and ultimately improve cash flow. “Add reminders in your diary to visit your property and conduct check-ups and little fixes. By having these visits planned out, you can prevent bigger issues from occurring. Early maintenance will save you money and improve your bottom line.”

4. Install More Efficient Fixture: He advises: “Installing high-efficiency items such as low-flow showerheads and toilets in your property can help reduce utility bills. Whether you cover bills as a landlord, or these are included in tenant agreements, you can entice tenants to lengthen their contracts if you can make amendments to the cost of bills.” 

5. Make Improvements Before You Let Out: “Making small improvements to your property will allow you to charge more rent. Leaving renovations for a later date can lead to further expense as you’ll need to fix any tenant-created issues whilst also trying to undertake additional renovations.”



6. Separate Bills: He asks: “Thinking about your tenant agreements, are utility bills currently included in the rent or does the tenant pay them separately? Separating some of these bills, if not all of them, from the rent is something you could consider to have a better cash flow. To accommodate the change, you may need to review your current rent cost and lower it slightly. But, you are likely to have a better cash flow overall from the change in billing. Your cash flow may not increase rapidly, but it will become more stable as you won’t need to worry about any fluctuations in bills such as water, gas, and electricity.” 

7. Collect Rent Via Direct Debit: If you are still collecting rent yourself, you could be placing yourself and your business at risk. Winterburn says: “We would recommend using an automated system to collect rental payments. This can help to reduce the likelihood of any personal issues or problems preventing you from collecting payments. If you prefer to collect rental payments, ask your tenant to set up a Direct Debit agreement to meet all upcoming payment dates.” 

8. Review Paid Services: Regularly reviewing any services you pay for is a great way to maintain a steady cash flow as a landlord. From employing a property manager to paying for monthly financial services, it’s best to make sure these services are worth the investment.  “We recommend every three to four-month, spending some time reviewing any paid for services you currently have and how much you spend on them each month. Review whether the investment every month is worth the reward and if not, consider terminating the service, and this will, in turn, improve your cash flow.”

9.  Review Payment Dates: “When it comes to managing cash flow, you should always have money coming in before you have to pay anything out. With this in mind, you should review the date mortgage payments leave your account and try to move the payment date to the few days following any rental payments, creating a buffer for yourself.” 

10. Respond To Issues Quickly: “When it comes to issues with your property, the sooner you can deal with them, the better. “Resolving problems quickly means you will be keeping your tenants happy while also minimising the likelihood of void periods, which creates consistency in generating income. We recommend getting into the habit of setting money aside each month to cover repairs and maintenance work. With these savings, you’ll be able to resolve the matter quickly, saving money and maintaining positive cash flow” Winterburn comments. 

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    Pass me the eggs and the sucking manual!


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