Rental properties are one of the best investments money can buy, and you don't even need a lot of money to get started. That's why there are over 22 million independent landlords around the US.
If you're thinking of investing in real estate, or if you're just getting started, then it's best to develop a good accounting system as early as possible. Let's talk about how to manage rental property accounting like a pro!
Track Revenue
Tracking rental revenues is fairly easy since the payments come once a month. When they come, save a record of them somewhere secure for future reference and add them to your accounting software or app like Quickbooks Self-Employed, or whatever you prefer!
Another option would be to have tenants pay online or through an app like Venmo or Paypal, which will track your income for you. Just keep in mind that some of these take fees.
Track Expenses
An easy way to track expenses for your rental property is to use one credit card to pay for all property-related expenses. This way, you'll have your business and personal expenses separated, and you'll just have to review your credit card statement when it's time to pay taxes.
Alternatively, take pictures of your receipts and store them in a backed-up folder on your phone or computer and try your best to keep the hard copies. You may also just want to write down these expenses by hand or in a spreadsheet or app.
Understand Deductions
Knowing the difference between business and personal expenses is one thing, but knowing your other deductions will save you a lot of money in the future. As a landlord, there are plenty of potential deductions on your taxes that could save you, including the following:
- Maintenance and repair expenses
- Business mileage
- Mortgage interest
- Property taxes
- Student loan interest
- Child tax credit
- Home office square footage
The list goes on, and there may even be some deductions at the state or local level in San Antonio. Make sure you know exactly which deductions apply to your circumstances and maximize your savings when it's time to file. Also, paying estimated taxes each quarter could save you a lot of hassle when the time comes to file!
Find Rental Property Accounting Services
When you hire the right property management services, you can rest assured that your accounting, marketing, tenant screening, budgeting, rent collection, and so much more are taken care of. For only a small portion of your rental income, the right property manager can take everything off of your plate, allowing you to earn passive income without having to worry about the accounting!
Get Help Today
Now that you know how to handle rental property accounting, let your real estate do the work for you and enjoy the checks as they come. Real estate is one of the best investments around today, so get started and remember to save big by following these accounting tips. Stay up to date with our latest real estate news and feel free to contact us with any questions about San Antonio real estate!
