Before Investing: How to Approach Rental Property Accounting

There are millions of landlords in the United States today, the majority of whom are "mom-and-pop" individuals who own just one or two properties. There are many benefits to becoming a landlord, including having a passive income source, flexibility to sell at the right time, and property value appreciation.

If you are considering investing in your first rental property or properties, it's important to understand the ins and outs of rental property accounting. In this blog post, we will share some practical tips to stay on top of your property accounting work.

These include creating separate accounts for each property, tracking all expenses and rent payments, and partnering with an experienced property management company. Let's get started.

Create Separate Bank Accounts for Properties

If you are planning to invest in more than one rental property, it's beneficial to create separate bank accounts for each one. With individual accounts, you can easily track and reference all of the financial transactions as they arise, without any confusion.

Your tenants can then deposit their rent into the corresponding bank account. From this account, you can also pay for related expenses such as mortgages, utilities, repairs, Homeowner's Association fees, and more. Having the same bank account for several properties can end up causing a real headache when it comes to property accounting.

Track All Expenses and Rent Payments

There are a few options open to landlords here. One is to keep a close eye on each individual bank account and monitor all payments and expenses.

Another option is to link your bank accounts to accounting or bookkeeping software. This is the recommended option as it gives you a granular view of how each property is performing. It also allows you to keep track of the overall financial performance of your property portfolio.

Partner With a Property Management Company

If you are new to rental property investment, it is highly recommended that you partner with an experienced property management company. They will help you to stay on top of every aspect of your rental property accounting.

Here at Avalon Realty and Oaktree Management, we provide bespoke accounting services to our clients. We track your financials and report to you monthly. Through our owner portal, you will be able to view statements and more quickly and easily.

How to Approach Rental Property Accounting

The bottom line is that rental property accounting can be tricky. That's why it helps to be prepared before you invest. The above information and tips will help you to successfully navigate the realm of property accounting.

If you are looking for professional rental property accounting services in Las Vegas, we are your premier choice. To learn more about our services, don't hesitate to contact our expert team.

In addition to property accounting, we offer a full suite of services to assist landlords. We look forward to speaking with you.