More than 75 percent of landlords collect rent in the form of personal checks. It's one of the last places where people use checks, and it's an outdated way to do business.
Keeping track of your rental property income and expenses can be confusing, and it's easy to fall behind. Here are some easy ways to help you simplify your rental property accounting process.
1. Open a Separate Rental Property Account
Fort Lauderdale is a great place to own a rental property, as it's a very popular location. A great bookkeeping tip is to create a different account for each rental property you own.
When you mix personal banking transactions with your business expenses, it creates a confusing mess. Separate accounts are more efficient, and you can quickly see which properties are struggling. That allows you to take action to reduce losses.
2. Use Payment Automation
Set up automatic payments for utilities and other monthly accounts. This step saves you time, which allows you to focus on other tasks.
When you own multiple rentals in Fort Lauderdale, this system can help reduce the monthly work of making payments for insurance or mortgages on each property.
Your payments will be made on time, avoiding costly penalties and boosting your credit score. That will allow you to save money on reduced interest rates from lenders.
3. Follow a System
If you're serious about accounting for your rentals, purchase software that allows you to record expenses by taking a photo of your receipt. Create a folder for each rental property to collect miscellaneous receipts and paperwork.
That will make it easier to reconcile your accounts every month. Track your expenses as they occur instead of letting them pile up. If you maintain several rental properties, you may need some accounting help.
4. Consider Property Management Services
If you work full time and your rental property is a side investment, you might consider hiring a Fort Lauderdale property management service. They will take care of the day-to-day details, and they understand accounting for landlords.
If you travel away from Florida for work or pleasure, a service can take care of your property while you are away. They can handle emergency calls from tenants and take care of urgent repairs.
5. Simplify Rent Payments
One way to streamline your accounting is to allow your tenants to make automatic rent deposits every month. If you use e-transfers, set up your account, so there is no need for a password, and it will simplify the process.
If you accept paper checks, get enough for the term of their lease. That way, it's a simple matter of pulling the checks for the current month and taking them to the bank to deposit.
Rental Property Accounting Tips
If you need a professional to manage your investment properties, reach out to a rental property manager. They can take care of your rental property accounting headaches, and you can focus on other important tasks.
Contact us at Tulsa Property Management for a free analysis. We can provide all the services a serious investor needs.