How we increased cash flow by $601 per month on 2 duplexes!

Question

In September we purchased 2 duplexes that share a parking area.  Since then we have increased the cash flow by $601.00 per month.  The previous landlords never increased the rent once a tenant moved in, so the rents were $600, $625, $625 and $700.

Here is what we did:

The $600 rent put in notice at closing, we rented that unit for $825 =$225

Increased the rent starting in January for the 2 at $625 to $700 =$150

The $700 unit just put in 30 day notice and we have it rented for $825 in January =$125

We passed the expense of trash service back to the tenants saving $66 month

called around for snow and lawn service and saved $35 per month.

We know the numbers could be better, but were surprised how fast we were able to turn it around!

Jeff B. · Answer

Bravo, you attacked both components of cash flow:  GSI - Expenses =NOI.

Rents will naturally be limited by the local market and your tolerance for vacancies.

Expenses should be reasonably stable except unforeseen occurrences.

Tyler Bernhard · Answer

Very well played. As you also said I bet there are some more opportunities to increase your return.

Thanks for providing the creativity!

Matthew Vitlin · Answer

Well done, especially tackling both the income and the cost sides of the equation.  Depending on the market, you can keep raising the rents annually until you meet/slightly exceed the market.

Ana Marie B. · Answer

Nicely done!  Congrats.  My husband and I are also interested in purchasing a duplex for our next property so this post was quite relevant.