Good bookkeeping for your properties will have a lasting impact on the health and stability of your portfolio. It’s an integral practice that will not only help you to monitor and expand your range of properties in the long term but will also make a difference when it comes to everyday tasks like digitizing receipts and generating reports.
With that being said, here is a comprehensive list of everything you need to know about rental tracking for successful property accounting.
Use the right tools
To do a good job, you need to use the right tools. Accounting software for small businesses is not new but you will reap a lot more benefits by using industry-specific property-management software. Once you are utilizing purpose-built software, your rental property income and expenses will all be in one easily accessible place, allowing you to update your books at any time from any device, saving you time and making bookkeeping as effortless as possible.
It’s all in the detail
When it comes to record-keeping, you can never include too much detail and this has never been more true than when managing multiple properties simultaneously. Approaching bookkeeping from a detail-oriented mindset will make it easier for you to personally keep track of your income and expenses for each property. It will also set you up well when it comes to filing taxes, so you won’t miss out on any deductions.
Consistency is key
Keeping on top of your real estate bookkeeping throughout the year will make the whole process more manageable than if you are only documenting your income and expenses at the end of the financial year when preparing for tax season.
Landlord accounting software allows you to maintain your records in an accessible way so you can be sure that you are remaining in control of your financial activity. Find what works for you, whether that means setting aside a portion of time every week to record your transactions, or dealing with them immediately using a rental tracking app like Landlord Studio. The end goal is the same: consistency.
There’s a lot of paperwork that needs to be kept when running a professional rental business. This, traditionally, leads to messy filing cabinets and manila folders overflowing with receipts. Thankfully, with the right tools, you can easily digitize your receipts and upload and assign documents to the relevant expense or property for posterity.
Given that all receipts over $75 should be kept as per IRS standards, being able to scan them with ease at the point of sale with a property management app is invaluable. Spend less time focusing on the paperwork and more time safe in the knowledge that everything is exactly where it needs to be.
Once you are in the habit of consistently monitoring your cash flow, you can take things a step further by turning your data into customizable financial reports with minimal effort. Assuming you are remaining consistent with your record-keeping, custom real estate software will allow you to generate a wide range of reports instantaneously. This will give you a clear insight into the financial health of your portfolio and allow you to focus on any areas of potential improvement, ensuring you get the returns you are looking for.
A few reports to look for in your property management software include; profit and loss reports, mileage reports, overdue rent reports, schedule E report, rent ledger, rent roll report and more.
It all boils down to this: the best real estate bookkeeping is detailed, consistent and accurate. This has never been easier, thanks to time-saving, landlord-focused software. Being able to efficiently record and keep a close eye on your finances will expose strengths and weaknesses, allowing you to grow your portfolio, whatever the current size, to its full potential. Software such as Landlord Studio is designed to help you to minimize bookkeeping mistakes and any associated stress, giving you easy, unrestricted access to your records at the tap of a button.