Guidance on Accounting & Monthly Statements - Article Banner

Some of the most urgent and important things you may focus on when you’re renting out a Kelowna property include finding a tenant, signing a lease agreement, collecting rent, and taking care of maintenance issues. You need to hold tenants accountable and keep your property in good condition. 

There’s also the matter of accounting. 

Monthly accounting statements are an important way to track your income and expenses. They keep you on the right path in terms of taxes and compliance. 

Even if you’re an experienced real estate investor, the financial particulars can become difficult to keep up with, especially if you’re renting out multiple properties. 

We’re sharing some guidance on how to track your financial performance and keep accurate and detailed financial statements. 

Separate Your Business and Personal Accounts

This should go without saying: you need a separate account for your rental income and business expenses. 

When you mingle your personal funds with your business funds, mistakes can easily be made. Make sure you’re set up to keep everything separate. If you own multiple properties, you might want a separate account for each property. This will keep you more organized and less likely to make an expensive mistake. 

Start by setting up your different bank accounts and files. 

Invest in Smart Accounting Technology

Technology can make a huge difference in the ease with which you can manage your financial reports, monthly statements, and property accounts. 

When you’re able to automate your financial records and bring everything online, you’ll have an easier time keeping those reports and statements accessible when you need them. It’s also easier to spot mistakes and make corrections. 

It’s likely all your tenants will want to pay their rent electronically. If you can accept routine maintenance requests online, you’ll have a documented record of when things were fixed and what was spent. 

Property management companies have established accounting systems that are online and available to owners who want to review their income, expenses, and forecasts. If you’re looking for something to help you manage one or two homes, you can find digital accounting products that will upgrade your technology in an affordable way.

Monthly Income and Expense Reports

accountingAt the simplest possible level, you’ll need to track your income and expenses. When it’s time to file your taxes, you’re going to need to demonstrate how much you earned on your rental property and how much you spent maintaining it. This has to be clear, accurate, and transparent. 

Even if you work with an accountant or a CPA, you’re likely the one who will be collecting the checks and paying for repairs. Make sure you can clearly see what you’re earning and what you’re spending on a monthly, quarterly, and annual basis. 

Working with a property manager, you should expect a monthly statement that reflects what you’ve earned and what you’ve spent on each property. You should have the rental amount included in the statement as well as property management fees, maintenance costs, pest control, landscaping, and any other recurring bills. 

Work with a Kelowna property management company that makes accurate, detailed, and transparent accounting a priority. You’ll find you have a clearer understanding of where you stand financially and what you can do to increase your earnings while reducing your expenses. 

We’d be happy to help you get your financial plans in order as they pertain to your Kelowna real estate investments. Contact our team at Vantage West Property Management.