How to Track Rental Property Expenses

The primary goal of owning rental property is to get a significant return on investment. One way to…

The primary goal of owning rental property is to get a significant return on investment. One way to achieve this is properly recording all income and expenses. Effective tracking and budgeting, allocating capital for other investments, and managing your account receivables are essential factors to consider in determining the profitability of your property. However, it is not always easy for property owners to keep up with how money flows in and out, hence the need to work with a professional property management company. 3 Options Realty is an experienced and well-trained team of property managers ready to help you keep track of your rental expenses.

Why Track Rental Property Expenses?

Landlords, property managers, or investors should prioritize expense tracking to maneuver the property management process successfully. Suppose you have too many commitments or lack time to track expenses on your rental property. In that case, we can help you bolster your income and ensure all your expenses are taken care of regarding repairs, payments, taxes, and maintenance.

We believe tracking rental property expenses goes a long way in determining whether you made a profit or suffered a loss. This is crucial information in filing your taxes. If you have incurred losses this year but made profits in previous years, you may use the losses to offset the wages.

Expenses You Should Track

Tracking rental property expenses is crucial for property managers and landlords to succeed in one of the most competitive industries. Failure to keep these records is an easy way to mess up, compromising the bottom line: making profits.

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Keep records of when tenants pay rent and how much they pay to protect your investment from disputes or legal action in the future. The last thing you want is to be sued by a tenant claiming to have spent more than the decided amount, and you have no records to prove it. Working with a reputable property management company helps you track all deposits you receive from your tenants for future reference.

Even if you paid for the rental property with cash and didn’t have to pay the mortgage, it is crucial to track all expenses, including repairs and maintenance. Since these expenses vary annually, we can help you leverage these records to get generous deductions from the IRS for certain repairs on your property.

Does Landlord Labor Count as a Rental Property Expense?

While certain types of labor are considered an expense, others are categorized as an investment toward your rental property. The only difference is where the work takes place or whether you hire someone else. Managing maintenance and repairs is part of being a landlord or property management professional, so any task you take on alone is not a business expense.

Many types of software help you track expenses, but it is always crucial to work with a trusted property management service. Leverage our extensive industry experience and expertise to enjoy quality services and make significant returns on your investment. Contact us at 3 Options Realty and schedule a consultation with our representatives.