Titus Maccius Plautus, a playwright from 200 BC, is credited with the saying, "You have to spend money to make money." Despite being said thousands of years ago, the saying still rings true today.
Every great real estate investor poured money into their property to reap a return on investment. This wouldn't be possible without a foundation for rental property accounting.
Keep reading to learn about rental property accounting tips for Bellevue, WA, landlords.
Separate Business and Personal Accounts
The first rule of rental property accounting is to keep your business and personal finances separate. Separate accounts are the foundation of successful rental property accounting frameworks.
Open a new bank account for business transactions. The account should include a credit or debit card to pay for property-related expenses. Income from the property will go directly to this account.
If you have multiple rental properties, open a business account for each of them. Having all finances go through a single account can complicate things.
When tax season arrives, you'll be glad you took this extra step. If you are audited by the IRS, the process is much easier to deal with when you have separate accounts.
Regularly Track Expenses
Owning a rental property comes with a lot of expenses. As a real estate investor, you need to track these expenses from the start.
You can track the money going in and out of your account weekly, monthly, or quarterly. The more expenses you have, the more often you should reconcile.
Updating your accounts more frequently ensures that accounting is a smaller job. When you regularly track expenses, you don't have to spend hours looking through them as you would if you were to let them pile up.
Utilizing accounting software can help you keep things in order. Not only will you digitize the entire bookkeeping process, but you can also automate a lot of mundane tasks.
Accounting software allows you to generate monthly reports so that you have better insights into your finances. A property manager can generate owner statements for you if you are a hands-off property owner.
Hire a Property Management Company
Some investors don't realize the scope of work that property management companies complete. In addition to managing your tenants, a professional property manager has accounting and reporting experience.
A property manager in Bellevue, WA, will benefit you by offering:
- Accurate financial records
- Budgeting
- Financial reporting
- Financial advice
- Tax handling and compliance
These services can help relieve a lot of landlord stress you may experience.
Work With Bellevue, WA Professionals
Having a rental property accounting system in place can help you reach your financial goals. Keeping records and tracking expenses is a lot more work than it sounds, and some landlords aren't equipped to handle the tasks alone.
That's why we're here to help. Brink Property Management, Inc., hires the most experienced property managers in Bellevue, WA. With over 27 years of local rental market experience, you'll have peace of mind that your property is in good hands.
We utilize a state-of-the-art web-based accounting system to provide you with monthly reports and financial tracking. Contact us today to get started.
