Organization
Even if you have only 1 rental you need to be organized and have a system that keeps all your records in order. I have a binder and it has the following tabs:
- Summary – 1sheet with tenant contact info, rental amount, security deposit amount, recent maintenance done
- Lease – lease and application, credit report, copy of move in money checks
- Maintenance – list of recent and future maintenance for the property
- Budget – check book, bank statements, property taxes, insurance, mortgage statements
- Communication – phone log of conversations, letters sent and received
If you have more than one property you definitely need a system. If you aren’t good at accounting then you might want to consider hiring a local bookkeeper to help you with this. By being organized your CPA will appreciate it when it comes to doing your taxes for your rental.
Being organized helps you to assess when to raise rents, review the last maintenance work that was done when the tenant calls and asks for something…has the plumber been to the property 5 times this year? If so, why..maybe the roots are getting into the pipes and you need to set aside money for a line replacement which is very expensive and you don’t want to be surprised by this emergency expense. I just had 5 properties recently that had to have lines replaced at a cost of $10,000-$25,000 per line!
In my business we use 5 section folders with the following tabs: property info (copy of ad, property details such as house, 2/1, 2 car garage etc.), Invoices, Communication, Owner Info (insurance, taxes, management contract), Tenant Info (lease, addendums) If I have an Owner with many properties I have a separate Owner file that contains info that would apply to all the properties.
Whatever system you decide to use, set one up and use it. Please don’t have a shoe box or drawer that you just toss everything into and then try to sort at tax time. This isn’t treating your rental as a business.
Please check out my website at www.PortolaRentals.com if you are interested in properties in Santa Cruz or have rentals in Santa Cruz, CA.
Kathleen Richards
