As you know, owning a rental property can help you save much money on taxes.
Depreciation and deductions are two of the best ways to do this. But you must keep outstanding records to show you are eligible for specific tax relief. You can start managing your rental property accounting with the following tips on how to keep records:
- Receipts: You no longer have to keep all your paper receipts in a shoebox. Digitise them! Use one of the many apps that can help you with this, and develop a way to keep records that will make it easy to find when you need them.
- Rent collection: Think about ways to collect rent online, and be sure to use a financial tracking app to make managing your property’s finances easier.
- Learn the metrics: Another part of accounting is comparing how well your property is doing financially. Learn the critical metrics for investing in real estate. This will let you properly audit each property and determine where you can save and make more money.
- Notices and bills: Again, you don’t need to keep paper copies of these documents unless required by law. Make sure to quickly scan everything you can and store it in your digital filing cabinet. This will help you with taxes and audits.