Keeping it separate when running your rental property business.
As a landlord, you’re running a business. And although it may be tempting to blur the lines between your business and personal finances, communication, and record-keeping, keeping them separate is vital. Here’s why: maintaining clear records will make it easier to track your rental income and expenses, stay organized, comply with tax laws, and communicate with your tenants and applicants.
Owning a rental property in Baltimore is a lot of work, but we hope these tips make it easier! So how do you get started? Read on for our tips on keeping your business and personal finances separate as a landlord.
Get a separate checking account for your rental property business.
Establishing a separate checking account for your rental property business is an essential step landlords must take to keep their finances organized and maintain boundaries between rental income and expenses and personal income and expenses. This can be relatively easy to do. Most banks provide solutions specifically designed for businesses and solopreneurs, often allowing you to open a checking account in minutes. Keeping your rental business transactions separate from your personal finances allows you to easily track your income and expenses related to your property, making end-of-year document preparation that much easier and giving you the full picture of your business finances. Make sure to research carefully before opening the account since different banks have different conditions, fees, and terms associated with each one.
Keep good records of all expenses related to your Baltimore Rental property.
Keeping accurate records of all expenses related to the property is critical for landlords. Make sure you keep a well-organized file for Maintenance requests, Repair invoices, and other costs such as tax, water, and other utility bills. Log Maintenance requests with the date, description of the issue, and costs incurred so if you need to explain why you spent that amount or wrote a check to the vendor. Repair invoices from vendors you used should detail line by line all parts used in the repairs, labor costs, as well as the contact information for the vendor and invoice number. These simple steps will help ensure your property stays in prime condition for years.
Keep a separate phone number.
Having a Google Voice number can be invaluable for remaining anonymous and keeping your personal contact information secure. Google Voice not only provides you with an alternate phone number, it also offers features like voice-mail transcripts, free international calls, and the ability to receive texts and voicemails in one inbox.
Be available to your tenants but don’t get involved in their personal lives.
You can also easily control how you receive calls or block unwanted ones. The Google Voice app is easy to set up and use, making it an ideal choice for those who need an additional phone number and the best part is the cost, its FREE! As a landlord, ensuring that your tenants feel heard and taken care of is part of the service you provide. Making yourself available to answer questions or address concerns can create an atmosphere of trust between you and your tenants. At the same time, landlords should maintain a sense of respect for their tenant’s privacy; while you still need to be accessible, there isn’t a need to get involved in personal matters beyond the scope of your responsibility as the Landlord.
Conclusion
A well-run rental property business requires careful planning and execution. Key points to remember are setup a separate checking account. This will make it easier to keep track of your finances and prepare for tax time. It’s also crucial to keep good records of all expenses related to the property, as these can be deductions come tax time. If you’re not interested in managing the property, consider hiring a professional property management company. Lastly, remember that clear communication with your tenants is critical. Be sure your lease outlines tenant responsibilities as well as your responsibilities, and be available but not too involved in their personal lives. Evicting a tenant in Maryland is never easy, but following these steps and our other tips and tricks presented in this series will help you avoid issues and be successful in your rental business. If you have a tenant who you need to get out of your property contact Baltimore Rent Court Agents today!