As a real estate investor, you have many things to track, including your rental property expenses. If you are overwhelmed by all the ins and outs of rental property expense tracking, reach out to The Property Management Connection at 615-840-2845 so you get the full benefit of professional expertise.
Of course, you’ll want to know a thing or two about rental property expenses and how to track them, as well. So what rental property expenses should you track? You should track any expenses you incur as a landlord, and many of them are tax-deductible, specifically:
- Pest control
- HOA dues
- Snow removal
- Subscription fees and dues
- Travel expenses
- Leasing fees
- Office supplies
- Mortgage interest
- Property insurance
- Professional services
- Property taxes
- Property management fees
- Sales and rental taxes
How to Keep Track of Real Estate Expenses
Three of the most often used methods of tracking real estate expenses are spreadsheets, property expense tools, and business expense tracking software. Each has its own benefits, but property expense tools provide a higher level of features than spreadsheets, while business expense tracking software provides more advanced features than property expense tools.
Tracking Rental Property Expenses with a Spreadsheet
Tracking rental property expenses with a spreadsheet is pretty straightforward, and many come with a template so you have a starting point. Here’s a great worksheet for landlords with prompts for some of the most common expenses. Plus, you can customize the worksheet to suit your needs.
Tracking Rental Property Expenses with a Property Expense Tool
There are many rental income and expense trackers available. One of the most popular rental expense trackers is Landlord Studio. This lets you create electronic reports, screen tenants, automate rent reminders, manage all your prospects and tenants in one place, and track expenses.
Tracking Rental Property Expenses with a Business Expense Tracking Software
One of the most advanced business expense software is QuickBooks. With a plethora of features for landlords, QuickBooks is more than just a payroll and accounting software — it provides a cloud-based solution for tracking expenses. Some key features of note:
- fast and straightforward receipt scanning
- automated categorization of expenses
- multi-user capabilities
- work from anywhere
Companies’ biggest struggle with financial reporting is receipt entry. Sometimes, employees lose or forget receipts, and this can wreak havoc on your finances and cost you deductions at tax time. With QuickBooks, all your staff needs to do is snap a photo and the receipt will automatically be stored and categorized.
Another vital component of expense tracking is payroll. Look for a platform that offers automatic payroll scheduling, as well as automatic calculating and tax filing, and same-day direct deposit. When you automate payroll, you speed up wage calculation and reduce the opportunity for human error. Plus, it's easier to make changes and reconcile your cash flow and 1099s, so you improve your recordkeeping and timekeeping accuracy all around.
Yes, you have options when tracking rental property expenses, and each has its benefits. When you choose the tool that provides the features most aligned with your business goals and needs, you will simplify the expense tracking process and your business will reap the benefits.
Image via Pexels