By Teo Zhenjie
March 29 2009
Whether you are a landlord or property manager, you'll find that accounting for leases will end up becoming one of your most important duties. Do you always take the time and effort to keep track of all of that money coming in and out, and are you diligent about it?
The truth of the matter is that there are plenty of landlords and rental property investors out there that are simply less on task about this subject than they should be, and at the end of the day, this is something that will very easily come back around and bite them when they least expect it.
It doesn't matter how large or small is your rental property is. You cannot simply stuff all of your receipts into a folder somewhere and forget them or you will end up doing yourself a grave disservice. What sort of problems might you face if you are lax about accounting for leases?
Rental Accounting Enables You to Keep an Eye on Your Tenants
One big advantage that you have when you look at having good record keeping for your rental property has to do with keeping good track of your tenants. Do you know who pays reliably and on time and who does not? This can make a big difference when a tenant asks for reprieve and what your decision should be.
The more organized you are, the happier your tenants are going to be. No one likes to live in a place where they feel that their money is being handled frivolously, and by keeping good records, you are showing them how responsible you are. Give them professional courtesy and professional treatment in this respect.
Accounting Allows You to Handle Your Taxes and Cash Flow Smoothly
Another thing that you will discover is that the better your accounting is, the more likely you are to have a good experience when paying your taxes. Even if you are not worried about an audit, you'll find that preparing your taxes and your paperwork for such tasks are going to be much easier.
Whether we like it or not, money is something that is very important to keep track of. Don't fall into a place where you need to worry about not knowing where your money is going to go. If you perpetually wind up short at the end of the month, it may be because of poor bookkeeping. Don't let this happen to you.
Accurate Figures Allows You to Make Sound Investment Decisions
Also be aware that when you keep good track of your leases that you are going to be able to make much better decisions for the future. For instance, are you in a place where you can move forward and expand? Good accounting for leases that you hold can tell you what is possible and what is not.
Your property taxes are not a laughing matter. They are one of the most important aspects of holding rental property. By making sure that you know what your rental cash flow is, you are going to find that you are in a much better place to deal with them.
Don't fall behind on accounting for leases; there is a lot riding on you keeping good books!
Teo Zhenjie has been showing landlords how to manage their tenants and rental property effectively on Propertydo ( http://www.propertydo.com/ ). Visit his website today for step-by-step real estate guides, free resources and forms. Click here for more important tips on accounting for leases:http://www.propertydo.com/accounting-for-leases.html.