Rental property accounting is notoriously tricky to learn. However, as a landlord, it's a skill you cannot ignore. Without good bookkeeping, you'll soon find your business drowning in the red.
The good news is that there are a few tips you can put into place right now to help keep your business afloat. Listed below are the top accounting tips every landlord should know. Continue reading to learn the secrets!
Separate Accounts
One of the first things you should implement into your landlord bookkeeping regimen is to separate your accounts. This means you should have a unique account for both personal and business use.
Once you've reached a place where you have multiple properties at once, you'll want to keep separate accounts for each of these as well.
All of this separation makes it a lot easier to keep your records organized. When all of the payments and withdrawals are in one account, it's almost impossible to keep track of things like rental income or your latest grocery bill. Plus, taxes are easier to manage when you can tackle them one at a time.
To save yourself future headaches, maintain separate accounts for all aspects of your business.
Latest Tech
As the world continues to go digital, you should try and do the same. Any landlord advice that says otherwise isn't looking toward your best interests.
Look for accounting programs that will work well with your latest laptop or mobile phone. Having access to your bookkeeping on the go can help you whittle away your workload even while taking a taxi or a bus.
Automation
Since landlords must manage so many things at one time, automation is your ultimate friend. Whenever you can implement an automated process, you'll save yourself a lot of work down the road.
It's a great way to reduce stress and allows you to put your focus on other tasks.
Automated processes can also include things like a tenant portal. This gives your tenants the ability to pay rent, look at an FAQ, and request maintenance without you lifting a finger. Having rental payments go directly to your records can save you a lot of time.
Flexible Budget
Having a lot of flexibility in your budget can protect you when unexpected finances pop up. Repairs, for instance, can throw your budget out of sync if you don't set aside funds for versatility.
Whenever you work on your bookkeeping, make sure to have some wiggle room within your budget. This will keep you going strong even during real estate emergencies.
Hire Rental Property Accounting
Our list of tips and tricks will help you get a handle on rental property accounting. However, sometimes even the best guidance can leave you feeling overwhelmed. When that happens, it's time to turn to professionals who can offload some of that stress.
PMI Denver West is a part of a larger franchise with worldwide recognition. Our experts can take over the detailed work of rental property bookkeeping so that you don't have to deal with it. Check our extensive list of services and let's work together toward success!
