As a property owner in Indianapolis, tracking operating expenses is an essential aspect of managing your rental property. Keeping track of expenses can help you make informed financial decisions, prepare for tax season, and ensure that you are maximizing your profits. In this article, we’ll discuss the best practices for tracking Indianapolis rental property operating expenses and how WILMOTH Group can assist you in this process.
Organize Your Records:
The first step in tracking your rental property operating expenses is to keep your records organized. This includes keeping receipts, invoices, and bank statements related to your rental property. Ideally, you should have a separate bank account and credit card for your rental property to help keep your personal and rental property expenses separate.
Categorize Your Expenses:
Once you have organized your records, you should categorize your expenses. This can help you identify areas where you are spending the most money and make informed decisions about reducing costs.
Some common categories for rental property expenses include:
- Repairs and maintenance
- Property taxes
- Mortgage payments
- Professional fees (e.g. legal, accounting, property management)
Use Accounting Software:
Using accounting software can help streamline the process of tracking your rental property operating expenses. Many accounting software options allow you to connect your bank account and credit card to automatically track expenses and generate reports. Some popular options include Quickbooks, Xero, and Freshbooks.
Keep Track of Mileage:
If you use your personal vehicle for rental property-related purposes, such as traveling to the property for maintenance or repairs, you can deduct the mileage on your tax return. Make sure to keep track of your mileage using a mileage tracker app or a simple paper logbook.
Use a Property Management Company:
If you find that tracking your rental property operating expenses is too time-consuming or complicated, you may want to consider hiring a property management company. A property management company like WILMOTH Group can help you manage your rental property expenses, including rent collection, maintenance, repairs, and more.
At WILMOTH Group, we use professional accounting software to keep track of all rental property expenses for our clients. This includes generating monthly financial statements that provide a clear picture of your rental property’s financial health.
Tracking your rental property operating expenses is a crucial aspect of managing your rental property. By organizing your records, categorizing your expenses, using accounting software, keeping track of mileage, and potentially using a property management company, you can ensure that you are making informed financial decisions and maximizing your profits.
If you’re looking for a property management company in Indianapolis to assist you with tracking your rental property operating expenses, WILMOTH Group is here to help. Contact us today at (866) 945-6684 to learn more about our property management services and how we can help you manage your rental property in Indianapolis.