If you've ever thought about how difficult money management is, you're not alone. Many people find organizing their financial records to be a tedious, time-consuming task.
Are you a Charlotte, NC landlord who's interested in simplifying your financial records? Here are some tips that you can use for any financial situation.
Keep Detailed Financial Records
There is no such thing as too much detail when it comes to your finances. It is better to have more information than to find you are missing important elements.
If this sounds like too much work, it may be a good idea to outsource the labor. You can rely on a property management company to handle your finances or work with a bookkeeper or certified public accountant.
You will need all the help you can get when tax season comes around. The extra labor you invest in keeping your records will pay off in the long run.
Evaluate Property Investing Metrics
Things like owner statements are a great way to see your finances from a bird's eye view. You can look at big numbers, such as total rental income and accumulation of wealth.
By looking at the big picture, it may be easier to determine where to cut back, or how much liquid assets you can use to invest in new properties.
Track Expenses
The last thing you need in your real estate business is more money out than in. But how can you tell if you're actually in the black?
Your bank account balance isn't always an accurate reflection of your financial position. A great way to see your overall net income is by looking at an income statement. An income statement shows your total income versus expenses within a designated period.
Use Accounting Software
Take the legwork out of your accounting processes with specialized software. The most popular software by far is QuickBooks, but there are many options out there to fit your needs.
One of the huge advantages of accounting software is the ability to automate transactions. You can connect the software directly to your bank and credit cards to categorize transactions in real-time. This will save you a lot of time and energy.
Separate Bank Accounts
Even if you only have one rental property, a separate bank account is essential. Personal and business finances shouldn't mix. This will create confusion down the road, especially during tax season.
You can connect the accounts under the same name for easier access, but stick to one account or the other for personal or business transactions.
Use These Rental Property Accounting Strategies
Rental property accounting does not have to be complex. With this guide, you can keep your finances in order and feel confident about your money.
Are you looking for help with your rental property accounting? PMI Amazing Spaces is the ideal partner for all things property management.
With over 20 years of industry experience, we can help you make educated financial decisions. Reach out to us today to get started, or receive a free rental analysis.
