Do you know the ins and outs of your rental property finances? Are you confident in your financial position or ability to invest in new assets? These are some of the reasons why rental property accounting is so important.
Want to learn more? Here are some property management tips so you make sure your landlord accounting is accurate.
Track Your Receipts
It may not seem like it's important, but saving receipts is essential for things like expenses tracking. Everything you spend on your business can be a tax write-off in the future.
Small expenses can add up quickly over time. Recording all of your expenses will give you a more accurate picture of your spending, and show you clearly where you can cut back.
If you work with a residential property management service, they can handle the bookkeeping for you, or even outsource it to an accountant or bookkeeper.
Maintain Separate Accounts
The last thing you need is confusion between your personal and business accounts. A single account looks like an attractive solution, but it can make things even more difficult.
Keep all of your rental income management in a separate bank account. When your tenants pay you, you can transfer that money to your bank account. It's important to have a clear record of what you spend and earn through your property rental business.
Stay on Top of Your Tax Returns
A key factor in your property management accounting is preparing for tax season. You might need to file different returns, depending on the extent of your property portfolio.
See if you qualify for some of the tax deductions for landlords. You may be surprised with how much you can write off, which will reduce your overall tax bill.
Figuring out which forms you need or returns to file may be confusing. In this case, you should consider working with a certified public accountant, or CPA.
They can prepare your state and federal tax returns, save you the most amount of money with write-offs, and submit your return to the relevant agencies with much less risk of rejection.
Digitize Records
Paper records can get lost or destroyed easily. It's vital that even if you prefer paper, you keep digital records of everything related to your rental properties.
Find a secure system in the cloud that you can access whenever you need the documents. Many cloud-based systems also have cell phone or tablet apps, so it's easy to view documents from anywhere.
You can also maintain document backups on a thumb drive or separate USB drive.
Master Your Rental Property Accounting
When it comes to rental property accounting, it may seem overwhelming to track your finances. It doesn't have to be. Use these tips to make sure you know where your money is going.
Are you a rental property owner in Lynnwood, WA? Consider working with PMI Brewder Realty.
Our expertise makes us the perfect partner to help with all of your property management needs. Contact us today to schedule a consultation or receive a free rental analysis.
