Discovering YOU Magazine April 2018 Issue | Page 19

BUSINESS CENT$

2. Keep credit utilization low.

When maintaining a property, having access to credit can be helpful because it lets you make repairs and keep things in good living condition for your tenants. One thing that can affect your credit score is the amount of credit you're using.

Unfortunately, keeping a higher balance could result in a lower credit score. As a rule, keep your credit utilization at 30 percent or less. For example, if your credit card has a $5,000 limit, the balance should not get any higher than $1,500. Throughout the billing cycle, keep an eye on the balance, and pay it down when you can.

3. Keep a cushion of cash.

It happens. You get that call about a water leak, and before you know it, you're spending your Saturday evening pricing plumbers, searching for one whose overtime rate is only in the range of mildly outrageous.

Being a property manager means expecting the unexpected, and one of the best ways to be ready is to have enough cash at the ready to take care of these problems. Build an emergency fund in your savings account, and keep your credit paid down so you always have that cushion to fall back on during any crisis.

4. Beware of low and no-interest financing deals.

When it's time to replace the oven range or a refrigerator, one of those "no payments, no interest for 18 months" deals can seem like a lifesaver. It sounds like a great deal, but these alluring promises are

"More than 8.5 billion credit scores compiled by VantageScore Solutions were obtained and used in the U.S. ..."

designed to play a psychological trick on you. Because you don't have to pay yet, it doesn't really feel like spending money when you're making the purchase.

However, once the interest-free promotional period is up, a double-digit interest rate often kicks in. If you don't have the cash to pay off the balance or make payments, you could end up with penalties that can affect your credit score. Before you sign on, always read the fine print.

Before you invest, do your research on credit scores and know your pros and cons. More than 8.5 billion credit scores compiled by VantageScore Solutions were obtained and used in the U.S. between June 2016 and July 2017. Whatever your stage in life, the market offers many options for those who wish to build their wealth through investing in real estate.