Rental Property Accounting Made Easy for Tampa Bay Landlords

Rental Property Accounting Made Easy for Tampa Bay Landlords

Did you become a Tampa Bay rental property owner to make more money? If you said yes, you're like many other investors.

However, you might find that you don't know if your property is profitable because you haven't been keeping up with rental property accounting records.

Our guide aims to help. Keep reading to learn about the best practices you should follow.

Don't Wait to Prepare Documents

One of the best rental property accounting tips is to stay on top of your tax prep by categorizing your transactions. At the very least, you should be handling this task monthly.

You'll have more clarity on your real-time business performance and minimize errors before you need to file a tax return. With accurate transactions, you won't forget to report any of your rental income or expenses.

Failing to prepare in advance can create problems with the IRS and cost you tax savings.

Use Automation Software

Expenses and income are often predictable and repetitive for a rental business. Instead of manually tagging the same transactions month after month, use automation software to tag transactions by category.

This can save you hours and ensure up-to-date reporting without a lot of work. Make sure the automation software you use maintains legal compliance standards in the real estate industry.

If you have transactions that require more context, add notes to them. This will help you remember what expenses are for and the sources of income.

Separate Business and Personal Finances

Managing rental properties is a business endeavor so you need a business bank account for each property. Your bookkeeping will quickly get messy if you use the same bank account for multiple properties.

Additionally, you shouldn't use the same account for business as you do for your personal finances. This can cause problems when tax season arrives.

Having a clear separation of transactions removes complexity and makes accurate reporting possible.

Keep All Receipts

Operating costs can get expensive and may come with a mountain of receipts. It's tempting to throw these away, but you'll need them if you get audited by the IRS.

Keep receipts for all expenses, especially ones for larger purchases like maintenance and repairs. You can make things easier by storing these receipts digitally. Scan or take a photo of the receipt to access it online.

When you invest in real estate, consider hiring a rental property management company in Tampa Bay. These companies can help you maintain your accounting records online and much more.

Rental Property Accounting Made Easy

Tampa Bay landlords need to understand the ins and outs of rental property accounting. By following the best practices in this guide, you'll be prepared for tax season and can track your profitability in real time.

When you hire a rental property management company, the accounting process is handled for you. At PMI Tampa Bay, we have over 20 years of experience in the industry on a local level.

Our key to success is understanding your property needs and providing prompt, customized services. Contact us today to start benefitting from our work.