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5 Tips for Bookkeeping in Your Property Management

October 22, 2018 | 11:14 am
Published by | Krunal Popat

Property management is no easy task thanks to the many different areas that you must manage to become successful. The financial responsibilities alone may be daunting and require expert property management accounting to keep everything in line. You must follow the law and proper bookkeeping practices if you want to stay profitable.

Here are five tips that will help you with property management bookkeeping that will keep you on the right side of the law and increase efficiency to improve your revenue stream while maintaining efficiency in your work.

Treat Each Property Separately

While you will operate from an overall budget, you should focus your efforts on treating every property as a separate entity. This means that budgets for each property should be set, so you can track its profitability. This is quite important because it lets you know what properties are doing better than others and helps you to identify issues quickly, so they can be addressed in a timely manner.
Create a System when Tenants Go into Default

You should know what to do when a tenant is not paying their rent. You should have a clear set of standards that go from warnings to evictions which each step outlined along the way. This is important because you need to treat each tenant the same, otherwise you might get challenged in court and lose if you’ve demonstrated different standards for different tenants.
Go with the Pros

When hiring outside businesses to conduct services on your property, go with the professionals. This means that you should use established, reputable businesses and professionals to do the job. For example, if you need plumbing services performed, then hire a reputable plumber that offers competitive rates for what they do. It may cost you more out of pocket, but the results will be worth it and less likely to be challenged by tenants.

Be Clear

Understand that tenants have the right to challenge any charge you place against them if they believe that the payment is not fair. For example, if you hire someone to make repairs and you charge the tenant a per-hour fee for their services, they may challenge that in court if the repairman makes an hourly salary.

This means what you charge has to be fair and the lowest that you can reasonably find for getting services from your local businesses.

Understand what Falls Under Lawful Disclosure

Depending on the laws set by local and state government, you may be required to disclose to your tenants a list of charges and expenses, including repair bills and security deposits. You should follow the letter of the law and exceed the requirements when necessary to improve communication between you and your tenants.

No one says that property management accounting will be easy, but it can be managed to a great extent when you follow the proper guidelines. By organizing your efforts, you can become quite efficient at property management bookkeeping which will help keep you in the black