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Record Keeping Tips for Real Estate Investors

Granite Gate Property Management

Helping Investors Succeed

When its tax time, are you scrambling to find receipts or spending lots of time organizing receipts for your CPA? Or are you an investor that just bought his or her first rental property?

In this blog piece, you are going to learn some record-keeping tips to save time! As a disclaimer, the following is offered as general information and you should discuss your personal situation with your accountant, CPA or other tax and legal advisers.

Tip #1: Don’t Commingle
Don’t mix personal and rental property expenses. Save time by organizing your rental income and expenses in one place. Find a bank that offers free checking accounts and open up a separate checking account for your rental property to track both your rental income and expenses. It may even help to get a debit card linked to your new checking account if you dislike writing checks.

Deposit all your rent checks and pay for all your rental property related expenses out of this new separate checking account. This way at year-end, you can avoid scrambling to figure out your rental property related expenses.

Tip #2: Organize Your Expenses According To Schedule E

Most investors report their rental property expenses on Schedule E. If this is how you report your rental property expenses, then use the different expense categories in Schedule E to assign to your expenses as you incur them. Consequently, at tax time, you can simply and quickly add up similar expenses to report on Schedule E.

If you use a personal finance or budgeting program like Quicken, just delete all the pre-set categories and enter new categories that match Schedule E. For instance, your personal finance program may come with pre-set categories like groceries or school supplies, delete all these pre-set categories and use the expenses listed on IRS Form 1099 Schedule E such as Advertising, repairs, supplies, utilities etc.

Consequently, at tax time all you have to do is just press a few buttons to create a report that sorts your expenses by category and you’re ready to fill out your Schedule E in a matter of minutes!

Thanks for reading! We are here to help with all your property management needs. We also advise investors on investment property purchases and sales.

If you are exploring investing in Davis Real estate, contact us at 530-231-5482 or to discuss your options.

Posted by: granitegate on October 19, 2015
Posted in: Uncategorized