Do you find yourself overwhelmed when you think about your finances as a landlord? Do you have trouble with efficient property record keeping?
If so, you may need to make some changes to your rental property accounting. Here are some tips that will help bookkeeping for landlords.
Keep Separate Bank Accounts
When you mix your personal and business accounts, you are setting yourself up for trouble.
It may seem more convenient to have your rental income flow into your personal account, but that couldn't be further from the truth. It will only make things more difficult when you need to determine things like net income.
If you have more than one rental property, it will be even more confusing. Keep a separate account for business income and expenses, and transfer owner disbursements from that account to your personal bank account.
Work With an Accountant
You may want to hire an accountant if you have a complex financial situation. Or, it may be beneficial to free up your time and commitment elsewhere.
An accountant can use software, such as QuickBooks, to manage the ins and outs of your rental property business. He or she will also be able to reconcile your bank accounts and verify transactions.
Depending on the size of your business, you can hire a basic bookkeeper or a certified public accountant (CPA).
Your accountant will also be able to produce financial reports for you. These reports will allow you to see exactly where your money goes.
Stay on Top of Taxes
It may hurt, but it is important to pay your taxes and file your tax returns on time. Failing to do so can lead to penalties and late fees.
If you don't have an accountant, work with a CPA firm to file your tax return. They can make sure everything is accurate and also find write-offs to help you save money on taxes.
You may also have to pay estimated taxes and other types of fees if you have a business, such as a limited liability company (LLC).
Look at Financial Statements
Financial statements can give you great insight into how your money is spent and how much you bring in from your rental properties.
Softwares like QuickBooks will automatically generate these types of reports, such as:
- Statement of financial position
- Balance sheet
- Income statement
- Statement of owner's equity
If you work with a property management company or an accountant, he or she can assist you in interpreting the financial statements. They may also be able to recommend ways that you can decrease spending and increase income.
Master Rental Property Accounting
Rental property accounting for your real estate business does not have to be difficult. With these resources, you can manage your Long Island rental property easily.
Are you looking for a partner to advise you on Long Island rental advice and property management? PMI Gold Coast Properties is your solution.
Our company offers a full range of property management services for both residential and commercial real estate. Contact us today to learn more.
