If you’re been thinking about investing in rental real estate, do it! And if you have done it, good for you! Now how do you manage that new rental property?
I don’t use automated software to manage my rental properties because I have not found one that meets all of my needs. I created a simple spreadsheet to do that and I will share it with you right here:
When I say “manage your rental properties,” I do not mean that I am actually fixing things around the property. God help any renter who asks me to fix plumbing! We hire property managers to physically care for the properties and to my mind, this is an indispensable expense.
What I mean by “manage” is that I pay and manage all bills that are not paid by the property management such as taxes and insurance. I also track how much we make each month/year against how much we spend with this spreadsheet. This is for tax purposes so that our small business does not pay taxes on the whole of what we have earned but rather is able to deduct all expenses before taxation.
Most good property managers will send you a monthly statement with each rent check. This is not enough to track your expenses however because it does not account for taxes, insurance, and any fees, fines, or tax assessments you get from the city.
I also use this spreadsheet to track logistical information about the property such as purchase and closing information, insurance contacts and policy numbers, and city treasurer logins if the municipality allows me to pay annual taxes online.
Having JUST visited my accountant yesterday, I am reminded how valuable this spreadsheet is. He asked if I could summarize what each property made/spent and I said, “See attached spreadsheet for each property!” Gosh that felt good! I do *not* want to pay my accountant’s hourly rate so that he can tabulate this information himself. Hell-to-the-no. Not when I can do it myself so easily.
One quick note about saving this document: I use Dropbox to save and sync these live documents to the cloud as well as share them with my husband. Of course Excel Online works well for this and Google Sheets would also suffice. Depends on your cloud preferences. I stick to Dropbox because I can put the worksheet in a file named after the property street address, along with PDF copies of the current insurance policy, tax bills, and monthly statements from the property manager.
This worksheet should be pretty self explanatory. Notice that each year has its own tab along the bottom to track separately. If you have any questions, please let me know! Good luck and happy wealth building!