If you are new to property investing or if the record-keeping side of things is overwhelming you, then read on for 4 tips to help get you on the right track.
1. Proof of Income and Expenses
Keep proof of all your income and expenses. You can scan receipts or take (clear) photos with your mobile and then save them in a folder on your computer or even save them in an email folder. Hard copies of records should be filed away in clearly labelled folders.
Keep a list of all assets purchased for your investment properties. This list should include the date of buying/selling the asset, what you paid for it or sold it for and a description of the asset. This will help your accountant calculate depreciation for the year. Don’t forget your receipts (see #1 above).
Use your Outlook Calendar or a similar tool to remind you ahead of time when important things are due – for example when your insurance premiums are about to fall due.
4. Keeping up to date
Enter all income and expenses in Excel spreadsheets or accounting software as soon as possible, or schedule in a regular time to do it. Keep on top of your paperwork so that it doesn’t build up to the point where it becomes a source of stress for you.
Extra tip: Don’t forget to make regular back-ups of all your financial information. Backups should be kept in (at least) 2 separate places eg saved to a USB and in the cloud.
If bookkeeping isn’t your thing, or you would rather be spending that time on other important tasks, think about hiring a good bookkeeper to do the job for you.
Do you own rental properties? Do you have any tips that work well for you?