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Property Investment Tips: How to Increase Cash Flow

As a mortgage agent focused on property investment, I understand the importance of your cash flow. Here are some tips about increasing your cash flow.

Mortgage Payment Strategies to Increase the Cash Flow

Interest-Only Payments

Some mortgage products may allow portions of or the entirety of your mortgage payment to be converted into interest-only payments. This strategy allows you to increase the cash flow of a property and its profitability while having the effect of reducing the amount of principal paid down on an investment but allows you to increase the cash flow of a property and increase its profitability.

Example:
Teresa and Kai’s monthly mortgage payment is $3000. With an interest-only payment option, their monthly payment is $2700 which is $300 less than the traditional mortgage payment option.

Skip-A-Payment

Some mortgage products allow you to skip a mortgage payment at predetermined dates. Skipping a mortgage payment allows you to collect a greater portion of profit or reduce the liability of a vacancy during a payment period. The skipped payment, which includes principal and interest is added to the balance of the loan. Used strategically, this can significantly increase your annual cash flow from an investment property.

Cash Flow Calculation 

Using the following analysis can help you predict the monthly cash flow from a rental property:

Market Rent

Monthly Mortgage Payment

Property Management

Vacancy Rate

Maintenance Reserve

Monthly Property Tax & Condo Fee Payment
(if applicable)

Property Insurance

Cash Flow

X

Y

a~10% of X

b~1% of X

c~5% of X

d


e~($110 – $150)

Z= X-(Y+a+b+c+d+e)

Cash Flow Within The Property

  • Renting additional parking spaces, renting roof space to billboard and telecom companies 
  • Using renovations or zoning changes to convert single household units to triplex units 

Contact me today to discuss your mortgage options.