Rental Property Bookkeeping Suggestions

Rental Property Bookkeeping Suggestions

Rental Property Bookkeeping Suggestions

Whether you are an individual landlord or a property management firm, managing the bookkeeping for your properties is essential. Below are some helpful suggestions:

  • Maintain at least three separate accounts to track funds received and disbursed: 1) security deposits; 2) rent receipts; and 3) company operating funds. The first two accounts are to contain no funds other than those for which they are designated.
  • A security deposit is to remain in the appropriate account for as long as there is no reason to refund it or charge any cost against it.
  • A rental receipt should be deposited the appropriate account before the rental management company takes its commission or fee.
  • Deposit funds promptly, preferably daily, into the proper account(s). Disburse funds promptly when due.
  • Duplicate deposit tickets should be retained in company records to verify deposit dates, amounts, and sources of funds.
  • All check stubs should have an explanation of the purpose of that check. Checkbooks should be balanced regularly with dated deposits noted on the check stubs.
  • Any interest earned should be transferred to the general account, as it is earned. Most states require that the security deposit be kept in a non-interest account.
  • A list of funds being held for others should be maintained and should be consulted and marked with any changes insuring an accurate knowledge of the amount needed in the trust accounts.
  • Lease files should contain a copy of the management agreement between the company and the owner of the property, copies of the statements to the owners as to records of rent received and disbursed, and maintenance bills.
  • Maintain separate cards for each property with the information on security deposits, rent receipts and disbursements to owners, or mortgage payments made on behalf of owners.

Leave a Comment