Once you take over your commercial investment property or a Class A office space Austin, or if you have one currently, one of the things you should be aiming for is reducing expenses. Because remember, it’s all about that net operating income and getting that net operating income as high as we possibly can. Reduce Your Commercial Rent in the UK is critical for your business
The first thing that most people think about to grow that net income is to increase rents, which is understandable. Another route you may want to take is the reduction of your expenses. Are there any of your expenses that if you work on them, that could be reduced? That should be a question that should be on your mind right away and something that you should be working on consistently. Let’s talk about a few areas where you could reduce your expenses.
1: Property taxes.
3: Utility costs.
4: Common area maintenance (see section on the Rule of 7% CAM to
6: Garbage hauling or waste removable.
7: Repair and maintenance costs.
These are the main areas where you can find some opportunity. Look at this list of expenses. Think of ways you can reduce the expenses. Because many times, it’s far easier to reduce the expenses than to raise income in many cases. For example, let’s look at property taxes. Let’s say the property you own is currently assessed by the tax assessor for $400,000, but you know that your property value is say, $350,000. Yeah, it’s nice to have an assessment of $400,000 and it kind of makes you feel good; however, it is assessed $50,000 higher than what the property is actually worth. What do you do? You protest the assessment and you get it lowered to $350,000. What will this do for you? Well, think of it this way, depending on how much property taxes you pay, it could save you thousands of dollars.
Let’s get to the math of it. Let’s say that for every $1,000 you pay in property taxes, it costs you $.40, so in other words, for every $1,000 of assessed value, you’re paying $.40 in property taxes. In our example here, we’re paying $50,000 more in property taxes than we need to be. $50,000 times $.40 is $2,000. So, we’re paying an extra $2,000 in property taxes per year, or $167 per month. Now, it doesn’t sound like very much, does it? Even if you can improve your cash flow by $2,000 that probably isn’t a huge chunk.
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