Do you find yourself worrying about your finances? Do you lack basic accounting skills to manage the cash inflow and outflow for your properties?
You're not alone. Many Americans outsource their accounting work, and rental property owners are no exception.
Luckily, there are easier ways to manage your rental property accounting. Read on to learn how.
Use Accounting Software
There are many different types of software on the market today that offer an all-in-one accounting package. The most popular is QuickBooks, which is an ideal option for small business owners.
This software can take the heavy lifting out of your finances. You can record revenue and expenses, and evaluate where you need to cut back or increase your income.
You can even automate some of your transactions so they automatically categorize. However, it is important to know the ins and outs of the software so you can understand what everything means.
Consider a Bookkeeper or CPA
If you have a large portfolio or don't want to deal with your accounting, you should consider outsourcing the work.
Your property management company may know a bookkeeper who specializes in property management accounting. This type of individual will also be an asset when tax season comes around.
A bookkeeper may serve your purposes if you need someone to track simple records. However, you may want to consider a certified public accountant or CPA.
Have Separate Bank Accounts
It may seem easier to keep your rental property finances under your personal bank account, but this is a huge mistake.
Your property is a separate business. Therefore, you need to treat it as such. Create separate bank accounts to deal with your income and expenses from your rental property.
For instance, once you receive your rental income for the month, you can then transfer it from your business account to your personal account.
Keep Good Accounting Records
When in doubt, save your receipts and record all of your transactions. This is vital because you may need them later on for legal problems, or if you have to deal with something like a tenant dispute.
Evaluate Your Finances Regularly
Take a look at your finances on at least an annual basis to ensure you have a good balance of liquid assets and you're not losing money.
You can evaluate your profit and loss for your real estate portfolio as well. Work with your property management company to determine if there are ways you can cut back on your expenses and increase your income.
Master Your Rental Property Accounting
You do not need to have an accounting background to have a good grasp on rental property accounting. With these tools, you can feel confident knowing your money is well-managed.
PMI Midwest is a premier property management service located in Indianapolis. With extensive market knowledge and experience, we can bring your rental property to the next level.
Are you ready to get started? Take a look around our website or contact us today for a free rental analysis.
