That being said, these document types can be difficult to draft and often require customizations for each tenant. Spreadsheets are the perfect way to record details on your buyers. In turn, that helps you visualize your sales pipeline.

Doing so will make rental property bookkeeping a lot easier and more accurate. For example, W-9 and 1099 forms are required from every employee and non-employees that do any work for your business. A W-9 form documents a contractor’s tax ID number and their type of business. A 1099 form will be additionally required for non-employees who made over $600 from your real estate business within a calendar year. Alternatively, you can use the cash method if you prefer to log income and expenses as they hit your account.

MREA Budget Model: Why It’s THE Most Important Model

So every time you spend money, every time you receive money, that’s a transaction that needs to be recorded in these records. You can keep it really real estate bookkeeping simple by just using a spreadsheet. Like my wife and I have a rental property that we manage ourselves, and we just keep it in a spreadsheet.

Better yet, you can use our automations feature to automatically send a reminder email on the last day of the month to make sure your tenants pay on time. There will be maintenance costs, emergency repairs, and insurance costs to calculate every month. All of which will be much easier with the help of a trusty spreadsheet.

How Do Realtors Keep Track Of Business Expenses?

A pie chart, for example, can show possible areas to reduce expenses. One of the largest expense items for every real estate agent is their brokerage split. Even though I spend a lot of time with my nose buried in spreadsheets, it’s still difficult to get a full picture of the data without a pie chart, report, or graph. This way, real estate agents can build proper budgets at home or decide if real estate is a career they should stick with.

• Learn how to set up your property accounting system start-to-finish, from rent collection to bookkeeping tips and more.
• This article, and the Roofstock Blog in general, is intended for informational and educational purposes only, and is not investment, tax, financial planning, legal, or real estate advice.
• Apart from the basic, essential components of a property accounting spreadsheet, there are also some more advanced functions that should be considered.
• This makes your sensitive financial data, such as bank accounts and rent payments, vulnerable to data breaches, potentially compromising the security of your business finances.
• And you could just in a sharpie write it on the credit card, this property number one.