The Importance of Accurate Rental Property Accounting for Dallas Landlords
How much was your rental income in the last 12 months?
If you cannot give a definite answer without going back to do some calculations, you certainly don't take rental property accounting seriously. Yet, like every business owner, you're supposed to keep your books in order.
Understandably, keeping tabs on cash inflows and outflows might not be your favorite activity as a landlord, but whether you're a numbers person or not, it's prudent to get the accounting right.
Read on for a few compelling reasons to prioritize accounting for your Dallas rental property.
Maximize Your Rental Income
As a landlord, you're always looking for ways to generate more revenue from your rental property. But it won't matter what strategies you implement. If you're not staying on top of bookkeeping, it will be challenging to increase your rental income.
When you're keeping tabs on the financial books, you'll have a clear picture of how much the property is bringing in at any given time. With this information, you'll be in a better position to create smart income goals. For example, you can resolve to increase your rental income by 10% over the next year.
Minimize Your Operating Expenses
One of the reasons you might not be achieving your rental income goals is that your operating expenses are higher. But you won't know this if you don't know how much you're spending on things like repairs and maintenance, property marketing, and outsourced management services.
Proper rental property accounting enables you to have a detailed look at your expenses and determine whether they are where you want them to be. The goal is to keep them as low as possible without affecting service delivery tenants, so you can quickly find ways to reduce them.
For example, if your records show that you're spending a lot of money on maintenance and repairs, you could investigate why that's the case and take corrective actions.
Minimize Property Taxes
Dallas landlords have both federal and state rental income taxes to deal with every year. That's the bad news. The good news is you're entitled to tax deductions that can significantly reduce your liability.
To take advantage of these taxes though, you need to have accurate records of your expenses. The IRS is going to need proof that you indeed incurred those expenses before accepting your claim.
A requirement of rental property accounting is property record keeping. As such, if you're keen on accounting, you'll likely have all the documentation you need to make the most of your tax deductions.
Be Keen on Rental Property Accounting
Landlords wear many hats and you might be tempted to overlook some functions. Rental property accounting is one of those functions you must prioritize. You'll earn more rental income and increase your chances of being a successful landlord if you're keen on your financial books.
If you're unable to, you have the option of outsourcing it to a professional property management company. In Dallas, look no further than Evernest.
Established in 2008, our company now manages over 16,000 properties. The experience we've gained over the years is reflected in all our offerings.
Get in touch to learn more about our services.
