Bookkeeping Basics for Rental Property Owners

 


 

When you don’t have your accounts in order, there’s no telling how well or poorly your rental property portfolio is performing to make targeted improvements.

If you haven’t started already, here’s how to record your real estate investments.

Don’t Take a Day Off on Transactions

Decide when and how you’re going to record your properties’ financial transactions. Randomly writing them down on your computer one day and a journal the next is not how you should be taking them into account.

Make an excel spreadsheet if you will, or find another way to keep everything organized. Update this file at least once a week, but don’t do it randomly. While recordkeeping for residential rental properties isn’t a daily job, you shouldn’t skip the one hour per week designated to them.

Stay On Top of Tax Deductions

Real estate investors may be eligible for deductions on the interest paid on a mortgage, property tax and insurance, ongoing repair expenses, hiring independent contractors, and more.

Tax deductions are prevalent in every facet of real estate, and they can help you save money and time with a simpler, shorter tax season.


Keep Separate Bank Accounts

As long as it’s allowed, seasoned landlords usually open a separate bank account for each property they invest in. Then, there are others who segregate accounts for individual units within each property.

However, even if you’ve only bought one property, you should keep it out of your personal account. That way, you can stop yourself from unintentionally using private funds for business reasons and get approved for tax cuts.

Set Aside a Maintenance Sum for Every Season

You must be wondering how bookkeeping is relevant to repair savings. You see, to set aside a sum you need to draw a fair estimate. Thus, you must have historical records of each season’s expenses to have enough in maintenance savings to pay for future repair costs.

As for inflation, experienced homeowners tack on a buffer amount to these savings to ensure they never have to tap into their rental or personal savings.

Now that you know how recordkeeping is done for multiple rental properties, you can go ahead and expand your real estate business. If cashflow’s your issue, apply for an easy hard money loan at Insula Capital Group.

The private lenders excel in real estate lending for residential rentals, constructions, fix and flip funding, and commercial bridge loans to new and seasoned investors, real estate professionals, and contractors.

Contact the real estate hard money lenders to get started.

 

 

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