Did you know that Modesto, CA is one of the best cities for first-time home buyers? With affordable housing, outdoor activities, and small-town charm, it's no wonder people are flocking to the City of Great Neighbors.
If you're a new landlord, you may be wondering how to keep track of the financial side of your properties in Modesto. Here are some rental property accounting strategies to use.
Keep Your Documents Organized
When you surround yourself with piles of paperwork, it can create a stressful environment. Not only that, but you may not be able to locate something important when you need it.
At the very least, a file cabinet will keep the paperwork out of sight. However, paperwork isn't always secure. It is also prone to damage.
Consider a cloud-based solution that you can access from anywhere. You can keep your documents organized so you'll be able to pull up anything you need on the go.
Work with a CPA
A CPA, or certified public accountant, can help you with all of your tough financial problems. This is especially important if you are a first-time landlord.
Your CPA can perform bookkeeping duties and utilize software such as QuickBooks. They will also be able to produce financial statements and go over them with you.
When it comes time to file your taxes, the resources that your CPA provides are invaluable. If they specialize in real estate tax returns, they can work to get you the biggest tax refund.
CPAs also require continuing education, so they're well-versed in changes to tax law and accounting procedures.
Review Financial Reports
Financial reports are a great way to see your finances from a big-picture viewpoint. When you get bogged down in the everyday details, you may not notice important trends.
Some of the most important financial statements include the balance sheet, the statement of cash flows, the income statement, and the statement of owner's equity.
Each statement serves a unique purpose for financial reporting. For instance, you can take a look at the income statement for rental income tracking.
Separate Personal and Business Accounts
One of the best property management tips is to keep your personal and professional finances separate. It may seem easier, but it can cause problems in the long run.
Open up a separate bank account for all of your rental property cash flow. Tenant rental income can go into that account, and you can pay for things like maintenance and repairs with the funds.
If you need to pay yourself, transfer the funds from your business account to your personal account.
Use These Rental Property Accounting Tips
Are you ready to start your rental property accounting journey? Using these methods, you can keep your finances organized and master accounting for landlords.
At PMI Central Valley, we combine our unique experience of entrepreneurship with over 20 years of experience. Let us help you with all of your property management needs.
Get in touch with us today to chat or schedule your free rental analysis.
