How do you track your tenant rent payments? Are you using spreadsheets, maybe Quickbooks, or are you doing it in your head? Every day, I am amazed by owners that have more than a few properties that don’t have any system for managing rent payments and tracking them. Here are just some thoughts on how to organize and simplify your property management life:
- In a perfect world, you would use a tool like Quickbooks to run your entire accounting operation for your rental properties. You would just set up each tenant as a “customer” and then auto-bill them rent at the 1st of each month. When they paid, credit their account. You could generate statement easily and professionally.
- Alternatively, use a spreadsheet. Even one from an on-line source like Google docs is better than nothing.
- Send statements to your tenants each month even if they owe $0. As we have been taking on new property management customers (over at Rental Management Guys), I find many owners do not send out statements. Then the first month that we are managing the building, I send rent statements and probably 25% of the tenants are surprised by how much they owe. If you don’t send the tenant a statement, how can you insure that you are both on the same page as to their current balance?
Additionally, using an organized system for recording rent payments is important when you want to sell the building. A prospective buyer is going to want to see your rent roll. Often an owner can only produce a handwritten ledger of when they were paid. If you are refinancing, your bank may also want you to produce a rent roll to confirm your income.
Take this extra time to build a system to track tenant rent payments. You will be happy you did. Alternatively, call me and let us manage your building and we will do it for you!