Are you a rental property manager who hates budgeting? For many people, budgeting for a property is one of the least enjoyable aspects of managing a property. However, with the right tools, your budget can become a way to get a deeper understanding of your properties and plan for their future.
1. Use Accounting Solutions That Connect With Property Data
When you're looking for accounting solutions, look for integrated accounting solutions for property management. With property management software that connects to popular financial software such as Quickbooks, you'll be able to track and report on financial data and property data in tandem. This allows you to track the complete history of a single property or group of properties, including the financial history.
2. Cross Check Your Payments
When you're managing multiple properties, it's easy to let a payment slip through the cracks if it's sitting in a pile of paper on your desk. Keep track of all of your vendors and payments with property management software. This will not only allow you to maintain a file on each vendor, it will also track the projects you've initiated and payments you've made, ensuring that you don't pay twice or neglect to pay an invoice.
3. Budget for One Time and Ongoing Costs
As you develop a budget, ensure that you budget for both one-time and ongoing costs. Those ongoing costs include items like periodic property inspections and maintenance. One time costs may include the cost involved in making a property suitable after an existing tenant moves out or working with a large problem such as a broken pipe.
Add a contingency fund for these unanticipated large expenses. Investopedia discusses the importance of adding a cushion to your financial planning: "Remember that although you may estimate that the business will generate a certain rate of revenue growth going forward or that certain expenses will be fixed or can be controlled, these are estimates and not set in stone."
4. Don't Just Track, Report!
As you track your spending using your accounting software, take a step back and structure what you track to ensure that you get the data you need in the long term. Choosing the right accounting reports can help you understand your properties. If you want to know what the ongoing yard care costs are for a group of properties in a single area, you need to set up your accounting software to track that.
Inc speaks to the vital insight that a strong budget and reporting system can bring: "If you don't have the discipline to sit down and assemble a business budget, you may not have insight into how your business is performing from year to year, whether there are cuts you can make to improve performance and whether you have the needed funds to purchase new equipment."
5. Get On Top of Your Taxes
Taxes should not be one of those large and unanticipated expenses mentioned above. Effective planning for your taxes not only gives you an understanding of what you need to pay, it gives you the ability to save on your taxes as well. Streamline your tax process and reduce your taxes when you keep track of rental property depreciation and investments you make in upgrades.
Property Management Budgeting and Forecasting Software
As your business grows, you need accounting software that integrates with your property management system, providing a seamless transition between property information and accounting information. When you're looking for property management budgeting and forecasting software, contact Propertyware. Sign up for a free trial today.