Today, we’re going to talk about cash-flowing rental property in Birmingham, Alabama.
There are four attributes of cash-flowing rental properties in this area, and if you can manage to do these things, you’ll earn a positive cash flow.
Focus on low-to-moderate income tenants. In Birmingham, this ranges from a rental price of $500 to $850 per month.
Next, be patient when it comes to finding a good tenant. We have had to show a house to 100 different people before we found a good tenant. That happens sometimes. One of the mistakes that I see people making is making a commitment too early to a tenant. Why is it a problem to make such a quick decision? Even though you want to lease the house as quickly as possible, you want to ensure that you lease it to the right person. You don’t want to lose the discipline of your underwriting criteria. Never sacrifice what you are doing to protect your investment simply to get someone in the property quickly. That is always the first part of a bad decision.
Next is to be attentive to work orders. We always hear stories about horrible landlords leaving air conditioners broken for months on end in the middle of the summer or other deferred maintenance. One of the things I think is most important is to make sure you keep tenants for the long term. A great way to do that is by making sure you are handling work orders in a timely fashion.
The last thing that is important is to remember that most low-to-moderate income tenants live hand to mouth. Often, you will need to be moderately flexible when it comes to your rent collection. That doesn’t mean that you want to let tenants get three or four months behind in rent payments. But it does mean that when the car breaks down, you are willing to be fairly flexible with when and how they pay rent.
It’s important to remember that having a low-to-moderate cash flow property is more of an art than a science. If you have any questions about achieving positive cash flow for your investment property, please don’t hesitate to contact us at gkhouses.com. We would be happy to talk to you about your goals and your rental home.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.