When you own property or homes that you rent out, financial management definitely becomes a bit more sticky. Yes, you can earn a ton of money, but you have to be able to get that money effectively from your renters while also maintain property value, paying taxes, doing maintenance, advertising, etc.
So, five things that you can do specifically if you’re considering heading down the path of property and rental management include being smart about utility payments, becoming and expert about local rental laws, having a professional do your taxes, reading up on bankruptcy proceedings, and keeping all of your necessary accounts separate as required.
Be Smart About Utilities
Financial management when it comes to utilities can be a real nightmare if you don’t have the right organizational structure in places, which means an accurate assessment of how much energy is going to which building, and how much of that many you can recover and conserve as a part of a greater program. Lucky for you there are companies that specialize in this kind of cost recovery now, and all you have to do is call them and give them a rundown of your setup, and they’ll tell you where their system will fit in.
Be an Expert About Local Rental Laws
If you ever been a renter during the course of your life, how many times have you been surprised by how little your landlord knew about the laws in place in your state and county about property arrangements and agreements? As a rental manager yourself, if you want to keep your money flowing smoothly, you have to read up about local rental laws and have them available for reference any time there’s any sort of a conflict.
Have a Professional Do Your Taxes
Especially with something as complicated as property rental and management taxes, you definitely want to hire a person or company that you can trust to do your business taxes. Just a few small errors on your part and you can be on the wrong side of a nasty financial audit.
Read Up On Bankruptcy Proceedings
As an owner, you need to understand bankruptcy, not necessarily because you intend on going bankrupt, but if you ever have a tenant that runs into the situation, you need to know what your rights are in terms of getting payment from them.
Keep Necessary Accounts Separate
And finally, the first steps out in the water of rental business may not require you to keep separate bank accounts for different things, but as soon as possible, separate all those out for the purposes of budgeting and accountability, because when those lines get crossed, financial liability can become a factor in the event of emergencies.
Categories: Real Estate