When you’re renting out a property, it’s easy to stay focused on the leasing and screening as well as the day-to-day management and maintenance of your investment. Don’t forget the important details like accounting and record keeping, however. Your financial reports and documentation will be crucial at tax time, when you’re planning your next investment move, and if you find yourself in court, trying to evict a tenant or defend yourself against a claim.
Working with a San Diego property manager can be beneficial for a lot of reasons, but one of the most important advantages is that good property management companies are completely online, providing a transparent and accountable record of expenses, income, and all the documentation you need to demonstrate you’re renting out your property in compliance with all laws and regulations.
Here’s what you need to know when you’re setting up a good system for accounting, finances, and other important records.
Invest in Good Accounting Technology
When you’re able to automate your financial records and bring everything online, you’ll have an easier time keeping those reports and statements accessible when you need them. It’s also easier to spot mistakes and make corrections. Most tenants want to pay their rent electronically. If you can accept routine maintenance requests online, you’ll have a documented record of when things were fixed and what was spent.
Property management companies have established accounting systems that are online and available to owners who want to review their income, expenses, and forecasts. If you’re looking for something to help you manage one or two homes, you can find digital accounting products that will upgrade your technology in an affordable way.
Have an Accounting Professional Ready to Help
Professionals who work in accounting understand how to help rental property owners, especially when it comes to declaring your income at tax time and making the appropriate deductions. Experience and expertise are important when it comes to accurate accounting. Don’t try to balance your books if you don’t know how. Hire a CPA or a tax accountant or even a bookkeeper who can keep you organized and compliant.
Like property management, accounting and financial reporting belongs in the hands of experienced professionals. These professionals understand industry standards and requirements, ensuring their work is held to a high standard. Experienced accounting professionals have the tools and the resources to help you make smart decisions. You’ll get more than day-to-day recordkeeping; you can count on detailed financial analyses and strategies.
Deadlines and Process are Important
The IRS tends to be pretty strict about their process and their timelines.
It’s also important to comply with security deposit returns.
Missing a tax deadline or filing date will be damaging to your earnings and your reputation. You don’t need that risk, and this is another good reason to hire a professional accounting service or property management team to handle you manage the finances associated with your San Diego rental property. You need accurate work that’s done on time. Late payment fees and penalties are going to hurt your cash reserves and keep you playing catch-up, which isn’t good for you or your property.
If you have any questions about property management accounting or how to keep your records and documentation in good shape, contact us at Chase Pacific Property Management & Real Estate Services. We’d be happy to provide additional advice.
