Are you a property manager struggling to stay on top of your finances? Do you find it challenging to stick to a budget and prioritise expenses? If so, you’re not alone. Many property managers face the same pain points and struggle to manage their finances effectively.
But don’t worry, there’s a solution. In this article, we’ll provide you with tips and resources to help you budget like a pro. From using companies like Lofti to financial advisors who can create cash flow plans, evaluate financing options, and provide tax planning advice, we’ve got you covered.
We’ll also share strategies for creating a realistic budget, analysing spending habits, identifying areas where money can be saved, and managing debt wisely. So, if you want to take control of your property business finances and thrive, keep reading!
What tools and resources can you use to help with your budget?
If you are managing a property management business, it is important to make sure you are using all of the tools and resources available to you as a landlord. For instance, a company like Lofti will be able to manage your budget for you and provide you with all of the ingoing and outgoings of your property businesses no matter how large your property portfolio is.
Another thing you can do in order to stick to a budget is to prevent tenants from causing disruption and making complaints in the first place. This can be done by giving the tenant a handwritten letter which will help put the relationship you have with a tenant on the right foot.
On top of this, a financial advisor can help make your life as a landlord much easier as a savvy financial advisor can analyse your rental income and expenses to create a cash flow plan that won’t leave you worried about every penny.
The best advisors will help develop a long-term financial strategy that can evaluate financing options and provide tax planning advice that can save you even more cash in the long run. With the help of a financial advisor, you’ll be able to have the peace of mind that you’re doing all you can to follow a budget for your property business as having the right team around you can help you do things like raise the rents of your property business too.
Creating a Realistic Budget
Creating a budget might sound like a chore, but it’s really not that bad if you approach it with the right attitude. To create a budget, you’d need to first figure out how much money you’re bringing in each month from your property business.
Then, list out all your monthly expenses, from the boring stuff like property maintenance and mortgage payments to the fun stuff like travelling between properties as a landlord. And don’t forget to include the occasional frivolous purchase as you may as well factor things like this in rather than pretend they don’t occasionally occur.
Now, comes the fun part which is categorizing your expenses! This is where you group your expenses into categories like “Necessities”, “Wants” and “Luxuries” for your property business which will help you understand where your money is going, and where you might be able to cut back to increase profits.
Once you’ve got that sorted, it’s time to get real with yourself by analyzing your spending habits and identify any areas where you could save some money. It might be hard to admit that you’re spending way too much but it’s all in the name of saving some cash.
Now, it’s time to set some goals and a budget. Allocate your money to each category of expenses and try your best to stick to it. Use budgeting tools like an app or software to keep track of your spending and adjust your budget if necessary.
Create a saving strategy
Creating a plan to save money can feel like trying to solve a puzzle but you shouldn’t worry about this too much as it is always important to understand that there is only so much you can save and there becomes a point where the effort to save more no longer becomes worthwhile.
For instance, if you’re going out of your way to save money by shopping at different places or spending a lot of time to pinch a penny here and there on repairs, this may not be worth it and you may be better with the peace of mind that will come from relaxing and enjoying the fact that you’re spending slightly more and any repairs you do conduct will last a bit longer because you’ll be using higher quality materials.
Another important tip is to use a high-return savings account which would be like multiplying the savings you already have. This becomes more and more important the more savings you have as you would ideally want your money working for you to some extent and you may want to consider investing in stocks or real estate to get the most out of this.
If all of this sounds a bit too complicated, you may be able to do something fun like create a 52 week saving strategy instead. This will give you a fun challenge with the same financial benefits
How to deal with debt
Debt can be some of the biggest things holding you back from saving money and should generally be paid off as soon as possible. In our article on whether you should pay off debt or save, we go over this in further detail. On top We go over how to work out how to pay off debt or save as a
Debt can be a big issue to deal with but with a little bit of strategy you can tackle it head on and get back on track with your finances if you want to. The reason why debt is so bad is because if you don’t pay off the interest on the loan, this can continue to accrue so by the time you have finished paying off your debt you pay far more than the original loan you took out.
First and foremost, you should prioritise the debt with the most interest or you should consolidate all of your debt into one place and then begin paying off one larger payment. There are debt consolidation companies that specialise in this and are able to provide you with a payment plan for all your debt so this is definitely worth checking out.
Another thing you can do is negotiate with creditors where you can attempt to get into a lower interest rate or payment plan. However, you may need to ask for help along the way as getting out of debt is a difficult process. Consider seeking guidance from a financial advisor or credit counselling service as they can help you create a plan to manage your debt and find ways to increase your income too.