Cleveland's recent jump in the cost of rent has ranked fifth compared to other American cities. Fluctuating rent is by no means the only number a landlord must keep track of.
Having precise rental property accounting records is fundamental in Cleveland, Ohio. Proper bookkeeping helps you track your rental income and expenses and prepares you for tax season, among other benefits.
Keep reading to learn dependable tips for enhancing your rental property bookkeeping and accounting skills.
Set up a Completely Separate Business Account for Accurate Rental Finances
The first step in maintaining accurate rental property finances is to create a dedicated business bank account. Keeping your personal and rental property transactions separate will make it much easier to track income and expenses. By having a designated account for your rental property, you can avoid financial confusion and ensure accurate bookkeeping.
Take Advantage of Rental Property Accounting Software
One of the best ways to streamline rental property bookkeeping is by using accounting software designed for property management. Cleveland landlords can benefit from platforms that are tailored to meet the unique needs of rental property owners. Such tools simplify tracking rental income, managing tenant payments, and organizing expenses.
Dedicated Rental Income Tracking
Consistent tracking of rental income is vital for keeping your finances accurate. Set up a system to record rent payments as soon as they come in. From there, verify that each transaction is reflected in your records. Regularly updating your income records will help you keep a close eye on cash flow and ensure that no payments are missed.
Automate Payments and Expenses for an Easier Time
Automating your rental property's financial processes can eliminate human error and free up time. You should set up automatic payments for recurring expenses such as the following:
- Mortgage payments
- Property management fees
- Utility bills
You can also ask your tenants to use automatic payment systems for rent collection.
Hold on to Detailed Records of Tenant Deposits
In Cleveland, landlords are required to handle security deposits according to specific legal guidelines. It's important to maintain separate records for tenant deposits and to document their use if any portion is withheld for damages or unpaid rent. Keeping detailed records of deposits, along with any deductions, ensures you comply with Ohio's rental laws and avoid legal disputes with tenants.
Enlist Professional Accounting Help When Needed
Do you want more landlord accounting tips?
If managing rental property finances becomes overwhelming, don't wait to get help from a professional accountant. An accountant experienced in rental property bookkeeping can assist with the following:
- Tax preparation
- Cleveland laws compliance
- Investment advice
It's Time to Excel at Rental Property Accounting
With these tried and true tips, you can stop feeling overwhelmed by rental property accounting.
In fact, you can hand over this responsibility and others to PMI CLE eAgent. Our passionate team can take care of property management accounting, tenant screening, advertising, and much more.
Are you ready to get the most out of your Cleveland investment? A free rental analysis marks the beginning of a beautiful professional relationship.
