Have you recently invested in a rental property in Jacksonville, Florida? With its stunning beaches and vibrant culture, Jacksonville is the perfect place to make extra rental property income.
Rental property accounting is a huge factor in the success of your rental property. Here are some things to consider so you can accurately track your finances.
Hire a Professional
Professional bookkeepers and accountants have the skills and expertise needed to organize your money. They often have formal education to help with any financial problem that may arise.
Look online or ask for recommendations for a good accountant. If you only have one or two properties, you may be able to hire a freelance bookkeeper.
However, if your property portfolio continues to expand, you may need to bring in a certified public accountant, or CPA. These individuals have rigorous licensure requirements and a higher level of knowledge than a bookkeeper.
Stay Up to Date With Taxes
When you acquire a rental property, you need to make sure you pay rental property taxes. Every state has different tax codes, and they change frequently.
Check in with your CPA regularly to see if there are any changes that you should be aware of. Changes to the tax code can have a huge impact on your rental property income.
Keep Accounts Separate
You may feel like you can handle all of your finances in one account. However, it's important to keep your real estate investment finances and your personal finances completely separate.
Use rental property accounting software to make sure the money goes into the right accounts. A good rule of thumb is to pay yourself a consistent amount out of your rental property income and have a system to allocate your finances.
Digitize Financial Records
Saving everything to the cloud is much more secure than paper records. Although it's important to keep paper copies, a digital backup will ensure the files don't get destroyed.
If you have a tenant portal, use it to upload documents like lease agreements, rental payment records, and security deposit information. This way, you and your tenants will have easy access if needed.
Evaluate Your Finances Regularly
When you own an investment property, it's vital to ensure you stay in the black. Look over your finances and see where you can cut down on expenses. You can also think of ways to increase your income.
If you work with a property management company, they may be able to give you some tips for your financial position as well.
Use These Rental Property Accounting Tips
You don't have to be an accountant to know how to financially manage your rental property. With this guide to rental property accounting, you will be able to increase your rental property income and keep your money organized.
If you're a new landlord in Jacksonville, consider working with a property management company like Northeast Florida Realty, Inc. Our expertise makes us the perfect partner for your real estate investment journey.
Ready to get started? Reach out to us today, schedule an appointment, or visit our office.
