The latest data from ZipRecruiter.com reveals that landlords in Eau Claire, WI, generate an average yearly income of $86,456, the fifth-highest in the state. So, as a property owner here, you could earn a lot by renting it out to tenants.
However, being a landlord is not just about collecting rent; it encompasses a lot of financial responsibility that warrants accurate rental property accounting.
To that end, our team of real estate management professionals at General Property Management put together this guide, sharing accurate bookkeeping tips. Keep reading to discover insights on precise accounting, rental income tracking, and property expense management.
Understand the Importance of Accurate Accounting
Maintaining precise accounting records is crucial for both experienced and first-time landlords because:
- It helps with efficient expense monitoring
- It makes income tracking more manageable
- It simplifies tax preparation at the end of the year
So, staying organized and up to date with accounting records can help you avoid potential penalties and maximize your profits. The last thing you want is for the IRS to audit or penalize you. IRS penalties are hefty; depending on the circumstances, they can range from 5% to 25% of taxes owed.
Essential Tips for Accounting Records
Here are some practical tips for organizing rental property accounting records:
- Use accounting software tailored for property management
- Keep receipts related to property expenses, repairs, and maintenance
- Separate business and personal finances with a dedicated bank account for rental activities
- Regularly reconcile accounts by comparing records with bank statements monthly
- Log any work done on the property, including costs and dates
Implementing these strategies can lead to smoother operations and better financial comprehension.
Enlist Professional Property Management Services
Does managing accounting records appear too overwhelming for you? If so, consider hiring a professional Eau Claire property management company. Their solutions encompass multiple services, from accurate accounting and financial reporting to effective property marketing that can help lower vacancy rates.
Leverage their expertise to navigate local laws and regulations, ensuring your accounting practices are compliant. They can also help you maximize your investment properties by providing expert financial advice tailored to the Eau Claire market.
Regular Financial Reports
A highly reliable property management firm should provide you with regular financial reports. They'll keep you informed of your property's performance and financial status. For example, they can help you determine whether you're:
- Making profits
- Just breaking even
- Losing money
Typical reports you should expect include:
- Profit and loss statements
- Account reconciliations
- Cash flow analysis
All those documents can help you make informed decisions about your investments. Use them to your advantage and ensure you can stay ahead in the competitive Eau Claire rental market.
Simplify Rental Property Accounting
Keeping detailed and accurate rental property accounting records is vital to thriving in the rental property business in Eau Claire, WI. The good news is that you don't have to do everything alone.
Our company, General Property Management, can help with our full-service solutions. From rental analysis to marketing, tenant placement, rent collection, and accounting, rest assured we can do all these (and more!) for you. We've provided top-tier property management services since 1994 to area landlords and tenants, and rest assured we'll do the same for you.
Reach out today for a free property consultation and learn how we can help you better manage your properties.
