Category: Landlord Tips

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Landlord Tips

Landlord Accounting Software

Accounting Software
Landlords have a choice for tracking rental income and expenses.

Tracking income and expenses for rental property is a task most landlords do not enjoy. Without a doubt, record keeping can be time consuming and often mind-numbingly boring. However, maintaining good records makes tax time easier and provides peace of mind. Therefore, it is important to understand how the rental property business is doing, and good landlord accounting software makes this task easy.

There is a lot of choice among landlord accounting software. The primary differences relate to cost, ease of use, and features (like reports). With the aid of the chart below, we take a look at some common ways, from the simplest to the most complicated, for tracking rental property income and expenses.

Tracking MethodPros & Cons
Spreadsheet* Free
* Create your own with Google Docs or Microsoft Excel
* Download free rental income and expense worksheet
*Cannot easily generate reports
Free Accounting Software* Free
* Simple and intuitive
* Easily generate reports like a Schedule E Helper and Profit & Loss statement
* RentalIncomeExpense.com
Paid Accounting Software* Expensive
* Can be overkill for a small landlord
* Complex and challenging to understand
* QuickBooks, Buildium, RentecDirect
Landlord Services * Provides benefits in addition to record keeping such as online rent payments, tenant screening, credit reporting, and vacancy listings
* Many times income and expense tracking is included as a free feature
* ClearNow, Zillow Rental Manager

Final Thoughts

Landlords have choice, and they range from simple spreadsheets to free landlord accounting software to paid accounting software. Find a solutions, as the important task of tracking income and expenses becomes easier with software for landlords!

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Landlord Tips

Smart Technology in Rental Property

Smart Technology
Landlords benefit from installing smart devices in rental property.

Smart technology is a term that describes devices that automate or communicate information to make life easier. It’s been around longer than we probably realize in items such as programmable coffee pots or thermostats. Most of today’s smart technology rely on the internet and smartphones (and even some voice commands!) making devices easier to operate (pretty smart, eh?). There are pros landlords should consider when investing smart technology in rental property.

Savings with Smart Technology in Rental Property

Smart technology commands an initial upfront cost. The devices themselves and installation are expenses landlords incur when up fitting rental property with these devices. In the long run, though, landlords will achieve savings with smart technology while attracting tenants looking to rent a smart home. An Entrata survey concluded tenants are willing to pay higher rents for a “smarter” home. These higher rents will offset the initial cost of the devices and provide savings for landlords.

Further savings can come directly from the devices. For example, installing cameras or a security system to the exterior of the rental property can give tenants peace of mind (and a desire to rent your property!). At the same time, landlords may realize some savings if insurance companies reduce premiums because of the security systems. Another example of savings can be from smart door locks. They eliminate the cost of locksmiths for new tenants or lost keys.

So should landlords install smart technology? Yes. With the initial cost of these devices, landlords can easily record these expenses and related receipts in RentalIncomeExpense.com – the free income & expense tracking software designed for landlords. Landlords can pocket the savings and continue to invest in their rental properties.

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Landlord Tips

Move in Checklist for Landlords and Tenants

Move in Checklist
The move in checklist is a valuable guide for landlords and tenants.

Lists are helpful tools as they serve as reminders. Grocery, cleaning, and “honey do” lists are just a few of the many popular ones to mention. The move in check list for landlords and tenants is a valuable guide for both parties. They can complete the checklist together during the walk through of the rental property so all parties are on the same page.

Checklist Benefits

For landlords, the move in checklist for landlords and tenants keeps track of the condition of the rental property. It also serves as a reference to identify any damage that may have occurred during occupancy beyond normal wear and tear. For tenants, the checklist serves as guidance for what repairs or improvements should be made prior to or during the tenancy. It also gives tenants an understanding of the condition of the rental before move in.

Checklist Contents

The move in checklist for landlords and tenants should include the main components of each room in the rental property. For example, items to check for in the kitchen would be a working refrigerator and clean and empty cabinets. For each room reviewed, there should be an area to identify any needed repairs or improvements. The move in checklist can also inform tenants on items such as setting up utilities, managing pets, and throwing away trash.

There are checklist-related tools available for landlords and tenants. For example, Zillow offers a downloadable check list. And landlords can use RentalIncomeExpense.com to track expenses related to agreed upon repairs and improvements.

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Landlord Tips

Rental Property Maintenance Expenses

Rental Property Maintenance Expenses
Landlords face a variety of expenses when managing rental property.

Landlords like to collect rent on time and in full. That’s the revenue side of the landlording business. The expense side can vary widely because of unforseeable surprises. Landlords can organize rental property maintenance expenses into two buckets – known and unknown. Understanding these expenses and preparing for them as best as possible are beneficial for landlording success.

Known Expenses

Known rental property maintenance expenses as those that landlords expect every year. Examples of these types of expenses include mortgage payments, insurance premiums, and property taxes. For the most part, these types of expenses remain the same year over year, and they are rarely a surprise to pay when due. Known expenses are the easier to budget.

Unknown Expenses

Unknown rental property maintenance expenses are more difficult to budget because they are . . . well . . . unknown. Many of these expenses are related to some form of repair. For example, the air conditioning unit could suddenly stop working in the middle of a heat wave, and you need to figure out how to remedy the situation as quickly as possible. Or, a pipe bursts and you need to quickly repair it to prevent damage to the tenant’s property or the rental property. To make life easier, it is wise to do your best to plan for the unexpected. Planning can include setting aside a budget for emergencies or a short list of professionals to help in a time of need.

As landlords incur rental property maintenance expenses, they can track them in landlord software. By tracking expenses, landlords can run reports that may help make budgeting easier for future years. RentalIncomeExpense.com follows the Form 1040 Schedule E expense categories.

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Landlord Tips

Landlord Income Expense Tracking Reports

Income Expense Tracking Reports
Landlord income expense tracking reports are necessary to gauge the health of the rental property business.

Landlord income expense tracking is an important task. One benefit of tracking such information is that the data can be used to create helpful reports. When used correctly, reports gauge the health of the rental property business and to assist accountants at tax time.

Landlord Income Expense Tracking Report #1: P&L

The profit and loss statement is a report that summarizes revenues received and expenses incurred with managing rental property. It shows how well or poorly the business is doing by its net income or loss. As a result of using this report, landlords can identify areas to reduce expenses or make improvements to strengthen the business.

Report #2: Schedule E Helper

The schedule E helper report is useful at tax time. This report is unique to RentalIncomeExpense.com. RentalIncomeExpense.com is free landlord accounting software. Landlords file schedule E with form 1040 at tax time. The schedule E helper report follows the same income and expense categories as those on schedule E, and it generates a report to help accountants at tax time.

Landlord accounting software makes it a snap to generate reports. In contrast, using a spreadsheet alone to generate reports is much more challenging. In conclusion, by using a good system for reports and data, landlords can quickly determine how their business is doing.

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Landlord Tips

Organizing Receipts for Landlords

Organize Receipts
Organizing receipts for landlords is important for running the business.

Landlording is a business, so organizing receipts for landlords becomes important. Businesses need to keep records of their activities, including receipts for purchases made. Receipts come in handy if you want to return an item. They especially come in handy if landlords are audited, as receipts show proof of purchase including prices paid. So what is the best way to organize receipts?

The best way of organizing receipts for landlords is the one which is easy and accessible. For example, you can keep receipts in a shoebox, file them in a three-ring binder, or take photos of them and store them in an online folder. Another tip is to organize them by date. If you file receipts away as you make purchases, they will automatically be organized by date making them easier and faster to retrieve. Landlords who track income and expenses using software like RentalIncomeExpense.com can get into a groove of recording the purchase in the software and then immediately filing away the receipt. The software will track the date of activity. When you need to pull a receipt, you just need to find it by date. Organize receipts by date, and you’ll spend little time on the hunt! Recordkeeping and organization make life easier!

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Landlord Tips

Renting to Tenants with Pets

Renting to Tenants with Pets
Renting to tenants with pets can be a win win for both landlords and tenants.

Landlords are in the business of providing housing in exchange for rent. Renting to tenants with pets has its pros and cons, but in the end, it can be a win win for both landlords and tenants.

Attract More Tenants with Pets

Those who own pets view their furry friends like children – important members of the family. Landlords who are willing to permit pets to reside in their rental property expand the size of their customer base. And having a larger customer base increases the number of potential tenants and thus strengthens the chance that your rental property will not remain vacant for long.

Increase Rental Income

Landlords can increase rental income by renting to tenants with pets. Due to the potential for additional damage to the property because of the pet, landlords can increase the rent amount or charge a pet deposit. Recording this additional income is easy, especially if landlords are using RentalIncomeExpense.com, which is free landlord rental income expense tracking software.

If pet owners are willing to pay a premium for their home, and landlords are willing to rent to tenants with pets, both are satisfied and a win win is for all!

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Landlord Tips

What is a Cap Rate?

What is a cap rate?
‘Cap rate’ is an easy term to understand

For a new real estate investor, the term ‘cap rate’ can be intimidating. Fear not! This term is easy to understand and we’ll explain how to use it.

Cap Rate is the Yield of a Property

Do you understand what the interest rate on a bank account or CD means? Do you understand what the dividend yield on a stock is? If so, you already understand what cap rates are. They are the yield (in percentages) or investment return of a property.

Here it is as a formula:

Cap Rate = (All income minus expenses / Property Market Value)

Let’s look at an example. If a property’s value is $100,000 and, for a given year, after all expenses are subtracted from all rental income, there is a net income of $10,000, then the cap rate of that property is 10% ($10,000/$100,000).

How Is This Used?

Investors compare cap rates when evaluating different properties on the market. Generally, higher cap rates are more desirable. However, just as a higher return can be a signal of risk, properties with high cap rates can often be more risky. For example, an investment may have only a single tenant paying all the rent or is located an area with declining economic prospects.

That’s it! Easy Peasy, right?

Now you know what cap rates are, how to calculate them, and how they are used as a comparison tool.

If you are looking to sell a property that you already own, it is important to track your income and expenses so that you can properly calculate your property’s cap rate. There are many tools to do this. RentalIncomeExpense.com is one such free online landlord software tool that tracks rental property income and expenses.

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Landlord Tips

Free Ways to List Your Rental Property

Free Ways To List Your Rental Property
There are great free ways to list your rental property!

At RentalIncomeExpense.com, we are all about free ways to improve landlording. After all, our rental income expense tracking service is free for all landlords and property managers. So, given that, what are the best free ways advertise vacancies?

Zillow is No Longer Free

Zillow used to be a great way to list your rental property for free. Unfortunately, Zillow now charges $9.99/week per rental property to advertise it on their Website.

If your rental market is pretty strong, you might not want to pay to advertise on Zillow when your property can be rented using other, free sites.

Free Rental Property Listing Websites

Fortunately, there are many ways to list your rental property for free. Here are three of the best:

  • Facebook Marketplace: Using your Facebook account, go to “Facebook Marketplace”. From there, go to a category called “Property Rentals.” There, you can easily create a new listing for your rental property. Facebook Marketplace is widely used. Best of all, Facebook Marketplace does not charge any listing fees.
  • Nextdoor: Using your Nextdoor account, go to “For Sale & Free”. From there, click the “Post a Listing” button. Finally, choose the category of “Property Rentals”. Nextdoor is increasingly popular. And, just like Facebook, Nextdoor does not charge a listing fee.
  • Craigslist: One of the oldest and most popular sites, Craigslist is still a way to list for free in most places. The exception is that apartment rentals in Boston, Chicago, and New York require a $5 listing fee. Outside of those cities, Craigslist rental property listings are free.

As you can see, when you need to list your rental property, there are some great free listing services out there. And, once your rental property is leased, don’t forget to track your rental property income and expenses with the free RentalIncomeExpense.com service!