Real Estate Investment Software

Several real estate investors find it boring to track and keep long records of rental expenses. Many people consider bookkeeping a boring process but it is vital as it helps you track rental income, keeps a record of all expenses, and notes on all your rental properties. A good record-keeping exercise can help landlords reduce the huge taxable income that they have to pay for deductions of rental activities. 

If you forget to claim any deduction on the tax return or lose after an IRS audit just because of an incomplete record can cost you a huge amount. 

What Record Do Landlords Have To Keep?

Small and local landlords who neither own a separate business entity nor employees are required to keep two kinds of records for tax purposes:

  1. Record your rental income and related expenses,
  2. Other supporting documents as proof for your income and expenses.

For each property that you rent out, you must have a record of the income and expenses related to that particular property such as a scanned check, e.g. in your IRS Schedule E tax return. 

In addition, you must save property-related physical receipts, credit card records. In the event of an IRS audit, you must keep the paper trail for any transaction that happened in that case. This can help you show that claimed expenses for any property reported in the tax returns are genuine.

No doubt, people still use handwritten ledgers and accounting books but using an electronic device or software will save you time and effort. Some ideas on record-keeping tools:

Paper vs Electronic Records

First of all, you have to make a decision whether you want to keep records on paper or will use software to keep electronic records. The IRS accepts both methods. 

In this current time, several small landlords still write and keep records on paper. Many people follow this technique when they just begin. Well, one can use a blank ledger book, a columnar pad, and notebook paper. There are also ‘one-write systems’ available which allow you to write checks and track expenses concurrently. You can easily get these items from any local stationery store. 

This manual record-keeping process takes a little more time but has the benefits of simplicity. People who have little or no knowledge of computers should try to follow this process. It is easy to create & understand, and convenient to update in opposite to computer algorithms that are hard to understand. 

If you want to use an electronic bookkeeping system, you’ll get various options. They come in a wide range from simple checkbook programs to advanced property management software. 

Record-Keeping Tools For Landlords

  • Spreadsheet

You can use simple and effective programs such as Microsoft Excel or Google spreadsheets to track income (rent, etc.) and expenses (insurance, maintenance, etc.). Spreadsheets have multiple tabs that you can use to keep income and expenses differently. You can create and use new spreadsheets for every new property.

  • Personal finance software

This software is used to track spending of monetary resources, create a budget, and plan accordingly for future expenses and financial risks. Various softwares are available and they differ from others by software code, feature support, import methods, mobile app features, development transparency, privacy, and settings, etc. These softwares are upgrades of spreadsheets as they operate off of an electronic checkbook. Also, the allocation and tabulation of income and expenses are automated. These softwares are faster and quite easier to use than manual spreadsheets. 

  • Accounting software

There are many accounting software for small and large businesses available in the market. Some of them are BetterCapital, QuickBooks, etc.  They can do everything that personal finance software can do and also have additional features like creating quotes, paying bills, creating budgets, sophisticated reports, maintaining fixed assets records, and more. 

  • Property Management Software

Serious and international landlords are recommended to use property management software. These are specifically designed to track rental income and property rent, and manage expenses. BetterCapital offers one of the best real estate investment software to track and maintain your expenses and help you find the right deals. This software provides features such as creating quotes in no time, track rental income, ROI, equity, payments, contacts, and more. It also allows you to integrate other applications that help you fetch data from other devices or storage. 

Therefore, stop wasting time and start investing it in valuable places and things.

LEAVE A REPLY

Please enter your comment!
Please enter your name here