Top 5 Property Management Mistakes
If you own a property management company, you know that it requires extensive accounting work. This is because you have to track both your tangible assets (property, buildings, etc.) and your intangible assets (permits, licenses, etc.).
However, with all of this accounting work, it’s easy to make mistakes. Here are the top 5 mistakes that the average property management company makes:
- Not tracking all of their expenses: This is a mistake because you can’t deduct all of your expenses if you don’t have a record of them. Make sure to track everything, from the purchase price of the property to the cost of repairs and renovations.
- Not keeping separate bank accounts: This is a mistake because it makes it difficult to track your income and expenses. It’s important to have separate bank accounts for your personal finances and your business finances.
- Not getting a property appraisal: This is a mistake because you won’t know the true value of your property unless you get it appraised. An appraisal will also help you determine the correct amount of insurance to carry.
- Not tracking their time: This is a mistake because your time is valuable and you should be compensated for it. If you’re not tracking your time, you may be working more hours than you’re being paid for.
- Not having a budget: This is a mistake because you need to know how much money you have coming in and going out. A budget will help you track your expenses and make sure that you’re not spending more than you’re bringing in.
By avoiding these mistakes, you’ll be on your way to becoming a successful real estate investor.
If you have any questions about real estate investing or need advice for your existing real estate portfolio, call us at BBS Accounting CPA today!