Real Estate Investing & Bookkeeping Tips
Keep papers organized by month rather than by category. This makes it easier to see when a document is missing and is convenient for your bookkeeper.
Once A Month
Review all statements - Bank, LOC, credit card - to make sure transactions are correct and there are no fraud charges.
Repay Non-Taxable Deductible Loans
Strive to repay loans when the interest is not tax-deductible. If you take 25 years to repay a $250,000 loan at 6% you end up paying $233,000 in interest. The same loan paid off in 15 years is only $130,000 in interest.
Negotiate A Loan Before You Need It
The best time to negotiate a loan is before you need one. If you have substantial equity built up in your house, you may want to ask your bank about negotiating a pre-approved line of credit, secured by your home equity. If you don’t use it, the LOC costs you nothing. If you do need money, it’s there for you.
Pay Off Credit Cards Monthly
Pay off your credit card balance every month. This will improve your credit rating and help you when you want to buy more rental properties or negotiate a loan or mortgage.
Review Property Management Statements
Review your property management statement every month. Make sure that the repairs they are charging for are yours and not someone else’s. Also look to make sure you haven’t been double charged accidentally. Mistakes happen every day, it’s your job to make sure they get fixed.
Treat It Like A Business
Treat your real estate investments like a business. Your job is to maintain your accounts and have the ability to report to your joint venture partners.