2023 Rental Property Accounting Tips

3 Options Realty recommends focusing on accounting to help you become a good tenant steward. It is advisable to onboard a reputable property management company for help with accounting, ensuring everything is in tip-top shape without compromising the revenue streams. Here are tips to help you get a handle on your rental property accounting.

Understand Transactions and Expenses

The best way to run a rental property and drive the bottom line is to bring organization and clarity to your accounts. This entails things like maintenance, rent collection, fees, and taxes, to ensure things become manageable in the future. It is advisable to consult a certified property management company to help organize and classify your expenses and transactions.

Landlords and property managers must organize transactions to prevent compromising the ROI through over-expenditure and billing errors. An excellent way to ensure your books stay organized is to take an account of late fees and extra expenses that you charge tenants.

Hire a Professional

Many rental property owners lose track of expenses, affecting profits and the venture’s overall success. You can prevent such issues by consulting a property management company to track expenses and manage your books. Property managers have extensive industry experience that allows them to take an-encompassing look at your needs and account for every issue. You may require the help of other professionals, such as a certified public accountant (CPA) and a lawyer. Rental owners can hire an accountant on salary or pay an hourly rate for their services.

Use the Best Technology Available

Technological advancements over the past decade have revolutionized most aspects of our daily lives, and the real estate industry is no exception. If you run multiple rental buildings, incorporating a software as a service (SaaS) dashboard allows you to ease rental collection, handle lease renewals, and make your investment journey less stressful. Many subscription models for these services ensure your accounting and management are organized and clean. You can also work with professional property managers to leverage their extensive industry knowledge and industry-standard technology.

Organize Your Accounts and Systems

Landlords and property managers must ensure all systems run efficiently. This means separating bank accounts and ensuring your SaaS links to mobile devices and all professionals have access to it, as well as emails and logins. This goes a long way in ensuring you keep track of security deposits, automatic payments, and documents such as tax statements and 1099s. We can help you find a system that works for you, making it easier to manage your investment and improve the life of your tenants.