Bookkeeping Tips for First Time Property Investors

The international real estate sector is growing at a promising speed. The industry provides real estate agents and companies with many opportunities for opulent transactions, so it is important to keep a check on the outflow and inflow of money regularly.

Being first-time property investors, you might find it tough to maintain account books yourselves. Real estate bookkeeping recurrently can assist you in staying on the path and getting a clear picture of your financial status.

Here are some smart tips for first-time property investors to foolproof bookkeeping for their assets:

1. Create or Seek Help from a Digital Filing System

• Manual bookkeeping systems comprise a series of ledger accounts or books.

• You can buy these record books at local newsvendors or bookshops.

• When you add the receipts and fill the pages, you gather an ample amount of information in one place, which you need to carry around all the time.

• Bookkeeping for real estate investors becomes simple with the help of a digital property management platform or software.

• Digital filing systems mean that property agents can easily update their record books from any place and any time.

• You will be just one click away when you need any information related to your case in a hurry.

• When you put your information online, your information gets automatically stored and saved.

• It also eliminates the risk of losing important documents that can increase your expenditures.

• Maintaining spreadsheets on a digital property management platform is another excellent means to keep a record of purchases, expenses, and income.

• Thus, you can easily access the information that you can store in one place.

• Good bookkeeping keeps you informed about all the latest information because of the consistent reviews and information saved online.

Keep Extra Copies of All the Receipts You Get

You should keep scans or photos of receipts as they are crucial and smoother to work with. There are many bookkeeping software that can scan receipts, which are searchable.

The digital platform can also link receipts to your credit card transactions and bank accounts, assisting you to secure your expenses and stay well-organized.

A.) Categorize Costs Correctly

• Commercial real estate investing in Australia involves a variety of small costs.

• So, it is significant to maintain an arranged record of these kinds of costs.

• Besides, the classification of costs accurately is also vital.

• Hard costs are directly related to the products and include 70% of the expenses of the project.

• They are definite things, and a competent estimator will be capable of arriving at this amount in advance with minor or no errors.

• You should carefully evaluate and group 30% of the remaining costs to avoid errors in the future.

B.) Keep a Track of Expenses

Tracking your expenses can be extremely laborious, but it will earn rewards for you in the further. Whether you maintain a digital or physical record, it is imperative to have a precise record of all financial transactions that you make in your real estate business.

Having distinct real estate business accounts makes it uncomplicated when tracking expenses. Online property management platform allows you to copy this data quickly and at any time, anywhere. 

C.) Keep Your Personal and Business Accounts Separate

• One of the essential principles of real estate bookkeeping is to begin by considering the property as a business and keep expenses related to this business separate from your personal overheads.

• A simple method to do this is to get a credit card registered in the name of your property or business by opening a new bank account.

• This way, you can track cash flow and the monthly revenue of your property account with no issues.

• It will provide you with a better sense of your business requirements.

Bookkeeping, for first-time real estate investors, can be a daunting process. With the help of a well-maintained filing system, investors can stay informed and make their moves in the right direction. Being meticulous with incoming and outgoing expenditures, you will not miss out on claimable expenses of hundreds of dollars’ worth.