Tampa Bay has one of the hottest real estate markets in the country. That is good news for property owners and investors, but it also means increased competition.
For this reason, property owners have to leverage every possible tool to stay ahead. Meticulous accounting, bookkeeping, and financial reporting are essential for doing so.
This article lays out five rental property accounting practices you should immediately put into place. Keep reading to learn how to get the most out of your Tampa real estate investment.
1. Separate Personal and Business Finances
One easy practice to implement is keeping personal finances separate from business ones. Regardless of how few properties you manage, maintaining independent records has many advantages.
Using separate bank accounts and credit cards allows for better rental income tracking. This is generally useful for record-keeping, including accurate financial reporting and simplified tax filing. It can also help with expense management, keeping it separate from personal spending.
2. Maintain Detailed Records
Keeping detailed records is another accounting practice that property owners should employ. It helps you more accurately see income and expenses, as well as cash flow over a particular time. This also can help you better predict costs and plan for the future.
3. Stay on Top of Taxes
Remaining compliant with tax regulations is vital for property owners. For this reason, it is important to stay up-to-speed on federal and state regulations that impact rental properties. This can make things go much smoother whenever tax season rolls around.
There are financial benefits to doing so as well. It can help you accurately calculate depreciation and keep up with deductibles. Minimizing your tax burden can add up to serious savings over time.
4. Use Rental Property Accounting Software
Rental property accounting software can be a valuable tool for landlords and investors alike. Many programs can automate rent collection and other payments by tenants. This ensures more consistent cash flow.
Accounting software can make tracking expenses seamless. It also allows you to categorize expenses, so that you can generate reports showing maintenance, repairs, utilities, and operational costs for each property.
Accounting software can generate information that forecasts income and expenses based on real data. This can help you better plan and determine where to allocate resources. Some programs, such as rent collection software, can also integrate with existing systems.
5. Hire a Professional
To get the most out of your investment property, you might consider hiring a professional for real estate accounting services. Turning these responsibilities over to the pros can free up time and alleviate the hassle of having to do them yourself. It also ensures better accuracy in reporting, which can benefit everything from tax filings to financial planning.
Learn More Property Management Tips
Now that you know some basic rental property accounting practices, you can better budget and plan for the future. An experienced property management expert can further advise you on getting the best return on your investment.
PMI Arrico Realty is a full-service property management company serving the Tampa Bay area. We offer a variety of services, including accounting and financial reporting. Contact us today to learn more about what we can do for your real estate business.
