Landlords: Do you know how to track your rental expenses?
This article from the Dana Olmes and Jeff Biebuyck Group and Frontgate Real Estate provides a few suggestions to help you choose the best way to keep track of your real estate investments.
What tools are available for tracking rental property expenses?
Three of the most common tools are spreadsheets, rental income trackers, and business accounting software.
Tracking Rental Property Expenses with Spreadsheets
Using spreadsheets to track your rental property expenses is a simple way to organize your data. Still, if you have more than a couple of properties, the process becomes more complicated.
If you choose to use this method, you will likely want to use a template, like the Tiller HQ Rental Manager Sheet. You can use it to track expenses, deposits, and income. Also, you can use it to view the annual, quarterly, or monthly status of your properties. Lastly, you can customize the sheet as necessary.
Tracking Rental Property Expenses with a Rental Income Tracker
A more advanced and simplified method of tracking the expenses for your rental property is to use a rental income tracker. There are several on the market.
One example is Rentler. You can use Rentler to automate activities like listing a property or collecting rent.
Rentler's key features include:
- Online payments
- Tenant tracking
- Credit check
- Tenant portal
One of the best features is automated rent payments. Once you invite your tenants to pay their rent on Rentler, the amount is direct-deposited into your account monthly.
Tracking Rental Property Expenses with Business Accounting Software
The most advanced way of these three methods is using business accounting software. This option provides far more benefits and has features like Tax Penalty Protection if you choose QuickBooks software.
What should you look for in a business accounting software?
One option is choosing a cloud-based expense management software. When you use cloud-based software, you can work from anywhere. This makes it easier to track expenses, especially if the software offers smartphone camera integration. Your employees, such as a property manager or handyman, can simply snap a photo of a receipt, and you won't need to worry that your staff will lose receipts or forget them.
Next, look for a platform for processing payroll that offers:
- Automatic payroll scheduling
- Automatic calculating and tax filing
- Same-day direct deposit
When you automate payroll, you make wage calculations quicker and decrease the possibility of human error. Additionally, it makes changes, timekeeping, and recordkeeping easier. Using a payroll tool is simpler and more efficient than calculating payroll utilizing a spreadsheet. QuickBooks Payroll offers all these benefits and integrates with other QuickBooks functions, and allows you to streamline processes.
The key takeaway is to find your best way to track your expenses for your rental property investment. By aligning the method you choose with your business needs, you ensure that you have what you need to make your real estate business run smoothly and remain profitable.
For more expert advice, contact the Frontgate Real Estate team.