.webp)
In 2024, the Dallas, TX real estate market continues to grow. From luxury properties to starter homes, the interest in Dallas shows no signs of slowing down soon.
Investing in real estate is a great way to put some extra money in your pocket if you're a property owner in the Dallas area.
Rental property accounting is one hurdle many landlords feel they can't overcome. Read on to learn about the best techniques for rental income management.
Learn About Real Estate Accounting
Consider taking a basic accounting course to understand the ins and outs of real estate finances. These skills can help you manage your cash flow, examine income, and cut back on expenses.
Your accounting skills may come in handy for property valuation or estimating how much to charge a tenant for rent. Finances also play a huge role in property performance optimization.
Separate Your Accounts
When you mix your personal finances and business finances, you're almost guaranteed to encounter disaster. Tracking income and expenses can be downright painful.
The best solution for this problem is to use separate accounts. Even if it seems easier to have rental income go straight into your personal account, it can mess up your financial picture.
Open up a separate business account with your bank under your name, so transferring money is as simple as possible.
Outsource the Work
You may feel like you're too tired or busy to focus on your rental property accounting. That is completely okay. Many landlords have day jobs or other properties in their care.
For basic accounting, a bookkeeper or property management company will suffice. They can track your transactions and record activity, so your statements are accurate.
If you have more complex accounting needs, you may require the services of a certified public accountant, or CPA. A CPA has the knowledge and expertise to give you qualified advice.
Depending on their specific qualifications, your CPA might even be able to prepare your annual tax returns. They can maximize your return and deductions, so you continue to save money.
Evaluate Financial Statements
Meet with your bookkeeper or CPA regularly and look at your financial statements. These statements give you a big-picture idea of what's going on in your business.
For instance, the statement of cash flows shows where your money goes in a given period.
A good rule of thumb is to view your property financials at least once every quarter. However, it's not uncommon to see them at the end of the month.
Master Your Rental Property Accounting
You don't have to worry about rental property accounting if you're unfamiliar with crunching numbers. Use this guide to determine if you can do it yourself or need to bring in outside help.
Are you looking for a partner in the Dallas, TX area? PMI Premier has the resources you need to feel confident in your real estate accounting.
With over two decades of experience in the property management space, there is no one more qualified. Reach out to us today for your free rental analysis.
