If you are a real estate investor, you need to make sure that you are keeping careful track of your money. It is easy for a property that you buy to lose value or to cost more to keep it up than its value is worth. If you are a real estate investor, here are some record keeping tips to keep you organized and make the most of your investments.
1. Keep Your Real Estate Accounts in One Place, But Don't Mix Personal and Rental Investments
In order to save time, you want to keep your real estate accounts in the same place so that you can easily perform audits and access your cash as necessary. However, you also don't want to unnecessarily complicate your financial situation by combining your personal and rental income. In order to be sure that you are able to manage your money quickly and efficiently but don't complicate matters, contact a bank that offers relatively free checking accounts. Then, open two checking accounts in your name: one for your personal income and property and one for your rental properties. Doing so will help keep your organized but will allow you to access your money without having to login to different accounts.
2. Organize Your Finances According to the Fields on Your Tax Forms
Next, you want to be certain that your expenses and income are organized according to each of the fields on the tax schedule that you are on. This will allow you to easily do your taxes on time but also keep you organized. For example, if you need to keep track of all of the expenditures that you have made with regards to certain rental properties of a certain size, have a separate field for this information on your spreadsheet or accounting software that you are currently utilizing. When it comes time to file your yearly or quarterly taxes, all you have to do is copy and paste this number into the software you are using to do your taxes and you are done.
3. Open Up a Debit Card for Your Rental Properties
Finally, if you don't like balancing your checkbook or keeping track of checks, considering opening a debit card for your rental property checking account. This will allow you to keep all of your expenses in one place without having to keep track of the receipts and will make it very easy for you to pay taxes at the end of the year.
For more information, talk to a company that specializes in record keeping., such as Rest Easy Property Management, for real estate investors.