5 Tips for Better Record Keeping for Rental Professionals

Better record keeping for rental professionals

Photo credit: 300td.org (Flickr)

Was tax season a pain for you last April? Spare yourself the stress next year by keeping better track of all of your rental property’s receipts, paperwork, and other financial records.

Keeping better records of your property’s paperwork and finances will help defend you if your tax deductions are ever questioned by the IRS, and will also tell you if your rental property is profitable. Here are 5 tips to follow to keep better records of your rental property.

Tip #1: Buy a receipt book. Receipt books are a great way to keep track of a renter’s payment. In fact, some states require you to maintain one. For every rent payment you receive, record the date, the renter’s name, check number, and the amount. If a renter’s payments are ever in question, you have your receipt book to fall back on.

Tip #2: File your expenses. Record all of your expenses and place them into designated folders. For example, you’ll want to separate the expenses by “Maintenance expenses” or “Operating expenses.”

Tip #3: Ask for invoices to be itemized. When you have the maintenance guy swing by your property, it can be hard to know how to categorize the work that was done when the invoices is really broadly written. Request that the each task that was performed is separated, so that you’re able to distinguish what category every task falls into.

Tip #4: Track your mileage. Yes, this is tax deductible, as long as you’re doing rental business only. When you’re driving around for errands involving rental business only, such as driving to the store for a new showerhead or to the rental property, keep record of this. Write down the date, miles, destination, odometer readings (before and after), and the purpose of your trip. For easy tracking, leave a notebook in your car to track this data.

Tip #5: Keep paperwork—ALL of them. This may seem like a no brainer, but sometimes rental professionals let some documents slip through the cracks because they think they’re no longer useful. Don’t forget to keep paperwork on: conferences you attend, tenant complaints, business cards of important contacts, and property-related e-mails.



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