As an investor in this dynamic real estate market, from the artistic alleys of Bentonville to the bustling campuses of Fayetteville, mastering the art of accounting for your rental properties isn't just good practice - it's essential for navigating the financial currents with precision.
Luckily, we're here to put you on the right path.
Let's go through our top rental property accounting tips.
Document Rental Property Income and Expenses
Record all rent payments received from tenants. Include the date of payment, tenant name, and amount received.
Document security deposits separately from rental income. Note the amount of each deposit, the tenant it belongs to, and the date received. Keep these funds in a separate account as required by Arkansas landlord-tenant laws.
Track expenses related to advertising vacancies, such as online listings, signage, and promotional materials. Note advertising costs incurred to attract tenants to your rental properties.
Look Into Rental Property Accounting Software
Technology is always key when you're real estate investing. Opt for cloud-based accounting software for its accessibility and convenience. This allows you to access your accounting records from anywhere with an internet connection, making it easier to manage properties remotely and collaborate with stakeholders.
Opt for software that provides tools for analyzing property performance metrics. This may include vacancy rates, rental yield calculations, ROI analysis, and comparison of income versus expenses across multiple properties for informed decision-making.
Prioritize software providers that offer reliable customer support and regular updates.
Ensure there is ongoing technical support available to address any issues or questions, and that the software receives updates to remain compliant with changing tax laws and industry standards.
Hire Property Managers
Bring in extra help if you can. Property managers typically have expertise in financial management, including accounting principles specific to rental properties. They can accurately track income, expenses, and financial transactions, ensuring proper documentation and compliance with accounting standards.
These professionals are experienced in tenant relations and lease management. They can handle lease agreements, enforce lease terms, address tenant concerns, and manage tenant turnover effectively, which can impact rental income and expenses.
Make sure that you're complying with fair housing laws, privacy regulations, and landlord-tenant statutes in Arkansas. Keep copies of required disclosures, notices, and legal documents related to rental property operations and tenant rights.
Keep Lease Agreements and Tenant Records
Maintain digital copies of lease agreements and tenant records in a secure, cloud-based system. This ensures easy access, backup, and retrieval of important documents from anywhere where you can get on the internet.
Document lease renewals, amendments, or changes to rental agreements in writing. Maintain updated copies of modified lease terms and ensure tenants acknowledge and sign any revisions to the original lease agreement.
Rental Property Accounting: Get on Top of It Today
Now that you have these Arkansas rental property accounting tips, you'll be on the path to success. Make sure you use them to their fullest effect, and you'll have no reason to fear.
Are you ready to hire local property management help? Check out HomeRiver Group. Our unique understanding of local markets has won us awards for our success.
Contact us today.
