If you're considering investing in rental property somewhere in Arizona, look no further than Chandler. According to AZ Big Media, it's the only city in Arizona to make the Fortune 50 Best Places to Live for Families 2024.
Chandler's high livability score will likely attract potential residents, including renters, and encourage them to move in. As a result, your chances of getting more prospective tenants will be high.
However, the more tenants you'll have, the more challenging rental property accounting can be.
Fortunately, the experts at Aloe Property Management have you covered. Read on as we've shared valuable landlord bookkeeping and real estate accounting tips in this guide.
1. Keep Accurate Records
Maintaining accurate records means documenting all property management financials, including income and expenses. Use accounting software or spreadsheets for:
- Rental income tracking
- Tenant expense management
- Property maintenance costs
- Professional property management fees
- Utilities
- Repairs and renovations
Keeping detailed records can facilitate management decisions and simplify bookkeeping during tax season. Moreover, it can help you avoid penalties from the Internal Revenue Service. IRS fines could be as high as 20% of underpaid or under-reported taxes.
2. Separate Business and Personal Finances
Mixing personal finances with rental property income may create confusion and complicate matters during tax filing. So, open a separate bank account dedicated solely to your rental properties.
A separate account allows clear transparency and simplifies tracking cash inflows (e.g., the rent you collect) and outflows (all property-related expenses).
3. Take Advantage of Tax Breaks
Tax season can be stressful, but it doesn't have to be. Familiarize yourself with the various tax deductions available for property managers and landlords. In Chandler, AZ, you can benefit from deductions such as:
- Depreciation
- Repairs and maintenance costs
- Property management fees
- Advertising expenses
- Home office deductions
Understanding these deductions can significantly reduce tax liability and help you save money.
4. Regularly Review Financial Reports
Another vital tip for landlords is to review your properties' financial reports regularly. Monthly or quarterly checks on the following allows you to identify any discrepancies and quickly act on them:
- Income
- Expenses
- Overall profitability
Many property management services provide comprehensive reports that give you a clear view of your financial situation.
5. Hire a Full-Service Property Management Company
If keeping your rental property's finances in order is too overwhelming, consider enlisting full-service property management solutions in Chandler, AZ. Such companies can handle all your lease-related chores, including:
- Property advertising and marketing
- Tenant screening
- Rent collection
- Accounting and financial recordkeeping
- Property maintenance, including contractor and vendor selection
- Tenant management
By outsourcing all those tasks, you can leave the complexities of accounting to professionals and focus more on growing your portfolio.
Ready to Simplify Rental Property Accounting?
Keeping accurate records, separating accounts, taking advantage of tax breaks, and regularly reviewing financial documents are all crucial to accurate rental property accounting. But if these tasks are too complex and time-consuming, remember: you can always rely on a full-service property manager to handle them on your behalf.
Let Aloe Property Management be that partner you can depend on. Our team comprises real estate and property management professionals who'll use their skills, knowledge, and decades of combined experience to make your rental properties in Chandler, AZ, flourish.
Call us today to learn more about how we can help and to request your free rental analysis!
