Every owner of investment real estate has a different objective. Some invest for retirement or to create a college fund for their kids. Others invest for the tax deductions and appreciation. One similarity between these and other types of investors is a recognition of the benefits of cash flow. Cash down the road never feels the same as cash in hand today.
In a market of rising prices and 100% financing, this income production can be hard to achieve in the initial years of owning a property. To maximize profit flow it is imperative to minimize costs. This is true of the new and seasoned investor alike.
One key cost cutting measure, which is often overlooked, is shopping around for insurance. Other than raising rents, this is the simplest way to increase profitability. Any investor paying over $1,200 a year for insurance on a four-family should consider looking elsewhere for insurance.
Property owners who have had their buildings for a number of years are prime candidates for improving their cash flow through this method. Many such investors retain the same insurance provider throughout the life of their investment. As their provider raises their rates, they continue to pay, believing that everyone’s rates to be on the rise.
Any reader paying rates higher than $1200 a year can put more cash into their pocket by making a few phone calls. There are many competent insurance providers throughout the area who can provide the value and quality of service every investor should expect and deserve. I recommend Greg Tainter or Trent Gaines out of Shelter Insurance (636.938.5500). Shop around, you won’t be disappointed.