With the average rental price in Hendersonville sitting at almost $1,500, it is the perfect place for a small property in your portfolio. When you start building up a small empire, though, you will need to keep your rental property accounting books in order. Do you know how to do this, so you do not fall foul of problems further down the line?
Below, we offer several of the most important tips related to keeping your real estate accounts in order. The following will also help you understand why you might want to seek out a good property management company moving forward.
1. Clear Documentation of Income and Expenses
Make sure to document every source of income that comes in and each expense that goes out. You need to ensure you have this information so you do not fall foul of taxation laws.
It does not matter if this is rent, maintenance expenses, or even food you have bought a tenant to tide them over while you fix their oven. It all adds up.
Keep detailed records of every transaction, including copies of receipts and invoices. If you have trouble with physical copies, take photos and hold onto digital ones.
2. Use Dedicated Accounting Software
One of the best ways to have an accessible record of all your data is to use accounting software to automate a lot of the processes involved. It can help you efficiently output all the information, and can often integrate with other software to make it even easier. If you work with an accountant or property manager, they can use software like this to track the money you make over time.
3. Ensure You Use a Separate Bank Account
Do not mix up your personal and business accounts. If you want to pay yourself, transfer it clearly into your personal account before you spend it. This ensures any audit will not flag any irregularities.
4. Balance Your Accounts Monthly
Do not get behind with your accounts. Having up-to-date accounts means they will not only be accurate, but you will remember any unique situations that occur much easier. You can then explain them or make notes related to why they are different.
5. Work With a Property Management Group
Working with a property manager can ensure that you have the expertise you need to avoid issues. They can ensure your bookkeeping follows regulations, and also save you plenty of time engaging with tenants. If you might have tenants who fall behind on payments, they can solve that problem for you.
Experts in Rental Property Accounting
Now that you know these basic tips for rental property accounting, you should find yourself breezing through a lot of the process. Still, the time you put in might still be too much, and it you be best for you to get a leasing management expert to help out.
We have expertise in financial, logistical, and many other forms of help for landlords in the Hendersonville area. So, if you want to find out more about what we can do for you, get in touch today.