In the United States, some 44 million households are renters. This is a large pool of people who pay good money to landlords or property management companies in exchange for a place to live.
If you're on the other end, you need to run your property in the most organized and useful way possible. Start by brushing up on some accounting tips for rentals that will help you be a good steward of your tenants. Which tips will help you the most?
Get a handle on your rental property accounting with the tips below.
1. Understand Your Transactions and Expenses
First things first, you need to bring clarity and organization to your rental property accounts. Things like rent collection, maintenance, taxes, and fees can become convoluted when you don't properly classify and organize your transactions and expenses.
Property managers need to organize these transactions in order to prevent billing errors and overspending. Take an account of late fees and other additional expenses that you charge tenants so that your books stay organized.
2. Hire a Pro
The best way to track property expenses and manage your books is by hiring the help of a property management company. These pros will take an all-encompassing look at your property needs and will make sure that every matter is accounted for.
You will also need the help of other professionals, such as attorneys and a certified public accountant (CPA). You can hire an accountant on salary, or pay between $150 and $400 per hour for their services.
3. Use the Best Technology Available
Make sure that you're also using technology to your advantage when taking inventory of your rental property. You can use a software as a service (SaaS) dashboard that organizes rental income, handles lease renewals, and makes every other part of your real estate investing journey easy.
Look into the different subscription models for these services so that you can keep your accounting and property management clean and organized.
4. Organize Your Accounts and Systems
Finally, make sure that you are on one accord with all of your systems. This means separating your bank accounts and making sure that your property management SaaS links to mobile, and that all of your professionals have access to it, along with logins and e-mails.
This will help you keep track of automatic payments, security deposits, and documents such as tax statements and 1099s. The more detailed you are in figuring out what system works for you, the easier it'll be to manage your business and look after your tenants.
Take Advantage of Rental Property Accounting
Rental property accounting gives you the chance to take care of your tenants while also managing the way you do business. Now that you have some tips that work, take the next step and get the professional help that can take your property management to the next level.
Income Property Advisors, Inc. can help you out with all of your property management needs. We're San Diego's top-quality company when you need property management, brokerage, and more. Drop us a line on our site or give us a call at (858)279-1500 for more information.
