Increasing Cash Flow in Single Family Homes

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Cash flow is what is left over at the end of the month, after all, the bills are paid. It is one of the cornerstones to building our portfolios and continued wealth creation. Cash flow is probably the most important thing we look at when investing in a property.

With interest rates where they are, it has helped on the cash flow front. However, as anyone shopping for a home today can tell you, property prices have been pushed up very rapidly, making it harder to find properties that make business sense.

One way to combat this, and continue to grow, is to find ways to increase your cash flow on single-family homes. You can then open up new business opportunities where you may not have had them before.

These opportunities can include investing in new cities, buying at different price points, or just being able to grow and expand your portfolio faster.

Some ways to increase cash flow include:


Implementing a Rent to Own strategy

Our rent-to-own strategy has been tested and used over and over again. By giving a tenant the option to buy the home after a pre-determined time, you are creating monthly cash flow.

You collect an up-front down payment to increase the amount of cash you pull out of the property from day 1, and in addition, you can get a higher rent by offering the tenant monthly credits to increase their down payment.

A nice bonus is that the tenant has a vested interest in the home and therefore, they tend to take better care of the property.


Increasing the down payment you put down on your home

This is a fairly straightforward strategy. The higher down payment you have, the lower your carrying costs.

Some members are using this as a way to put their money to work where they have control, instead of relying on a stock or bond that can have unpredictable returns.

Buying a cash flowing piece of real estate allows you to ride the ups and downs of the market.


Providing student housing

Clean, safe, and well-located student housing will always be in demand. A major positive of these types of investment properties is that you can typically charge between $350-$600 per bedroom, depending on the school and location of your property.

There is more work with a student home, but the payoffs can be impressive.

Just recently, we worked with someone and we found a great single family home close to Western University. This one student rental would have a revenue of $2,000/month. To make things even better, we looked at the numbers and found by investing around $2,500 in repairs, we are going to be able to increase our monthly income by approx. $500/month. That brought the total revenue of the property to of $2500/monthly.


Creating a secondary suite

Secondary suites, in-law suites, or basement apartments, are a cash flow strategy that has been about for years, but the changing market in Ontario has expanded this option.

Soon, cities in Ontario will no longer be able to outright ban secondary suites in homes. They will now need to come up with rules surrounding their existence.

This is a great opportunity to take the right home and greatly increase the monthly income it creates.

To give you an idea of the numbers we are talking about, if a home would rent out for approx. $1,500-$1,600, you can most likely bring that up to $2,300-$2,500 by renting it out to two different families.


NOTE: The rules will be different for each city, so make sure to research the rules and regulations for your city.

Regardless of which strategy you feel is best for you and your goals, remember that there are strategies to help you evolve and grow as an investor.


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