Being a landlord means you’re in charge, but now that you’re the boss, what do you need to know? Chances are, you’re looking for the best way to make the most out of your properties and your finances. To help with that, here are the best accounting hacks for landlords looking to make their lives a little easier.
Invest in rental property software
Rental property software makes being a landlord much more simple. You can market your properties online, provide an online rental application, and screen and manage your tenants from home.
That last bit is important: one of the easiest ways to lose money as a landlord is by not thoroughly screening your tenants. You want to make sure you are finding the right people to rent your properties. These people should be trustworthy and communicative and always pay their rent on time.
Rental property software can also help you keep track of rental payments. You don’t want your tenants to be paying their rent in the mail with checks; this causes added stress for you and can result in bounced checks. Also, it’s much easier to pay rent online.
Checks are no longer a popular form of payment, so your tenants are likely accustomed to paying their bills online or through apps. If they know it’s simple to pay their rent (maybe even as simple as automatic payments), then they will be much less likely to miss a month.
Use a digital accountant
You might find yourself totally overwhelmed with the financial part of your position. That is totally normal and expected. The smartest thing you can do is look into outsourced accountancy services. Your outsourced account will help you manage all of the financial aspects of your business.
First, you want to make sure you’ve separated your personal finances from the business’s finances. You might think that being a landlord is not like being a business, but when your finances are separated, you will benefit from business-related tax deductions.
Your digital accountant will help you understand the state of your finances, and since you don’t have to spend time trying to grapple with your financial state, you’ll have the time to focus on your properties. A professional is always the best person to handle your money, and you’ll notice the enormous benefits of having hired an accountant for your business once it becomes tax season.
Consider other sources of income
The landlord’s largest source of income is, of course, the rent. This should always be your primary focus. If your tenants are behind on rent, you need to evict them and make sure you are finding reliable and trustworthy people to rent your property. But there are other ways to make money beyond the rent, and part of being a great landlord is accessing these opportunities.
Maybe you’ve noticed that your tenants don’t have enough space, requiring them to rent out storage units in a nearby facility. This is a great opportunity for you to take advantage of the space on your property and have a shed built that you can rent out to your tenants.
They will be thrilled with the convenience of having it on site, and you’ll have another source of monthly income. Get creative with things you can do to make a little extra cash and you’ll notice a huge difference in cash flow in no time.
As a landlord, your focus should be on your tenants and your properties. That’s why it’s important to know how to take the best steps for your business and make sure it’s thriving.