Accounting errors are frustrating. They’re also easy to make, especially if you’re not a professional accountant or bookkeeper. When you own rental properties in San Mateo, you might think that a CPA or a tax accountant can help you keep yourself organized and error-free.
There’s a better way to go, however.
Work with a San Mateo property management company instead. A professional property manager can offer a lot of services to you and your rental property. Your management partner will take care of marketing and leasing your home, screening tenants, and collecting rent. We’ll enforce the lease, conduct inspections, and respond to maintenance.
We’ll also manage your accounting and bookkeeping.
A good management partner will be an expert financial steward for your property, leaving you little room for error and a lot less risk.
There might be some hesitancy when you think about outsourcing your financial statements and accounting reports to a property manager. After all, there’s a lot of confidential information mixed up with your money. Maybe you’re unsure about whether someone else should have access to your financial records.
We get it, money is incredibly personal.
However, if you don’t outsource your accounting and financial management, you’re likely missing a huge opportunity and potentially making a lot of expensive mistakes.
Your San Mateo rental property can likely benefit from detailed, accurate, and transparent financial management. When your property manager is taking care of your accounting, there’s also a better chance that costs will be kept under control.
Let’s talk about why outsourcing your accounting to a professional property manager will serve better by avoiding accounting errors.
Leverage San Mateo Property Management Accounting Systems
Most San Mateo property management companies have experienced staff members with specific experience in accounting and bookkeeping. Knowing that you have access to these professionals will provide peace of mind – they know the fundamentals of accounting better than you do.
This area of specialization is going to help you stay in compliance with generally accepted accounting principles. It will help your financial records remain clear, easy to read, and accurate.
Professionals who work in accounting understand how to help property owners and investors like you achieve their financial goals. You’ll know whether you have a profitable investment property or one that’s bleeding money.
Experience matters, and if you personally are lacking in accounting expertise, you could run into problems when it comes to balancing the books or forecasting your future earnings.
Systems will already be in place when you partner with a property manager in San Mateo. You won’t have to set up your own accounting files or try to figure out how to put together a balance sheet. Everything will be in place already, and there’s not much you’ll have to do.
Experienced property management accounting professionals have the tools and the resources to help you make smart decisions. You’ll get more than day-to-day recordkeeping; you can count on detailed financial analyses and strategies.
Preparing for Tax Time with the Help of Property Managers
Missing a tax deadline or filing date will not be good for your investment portfolio or your finances. You don’t need the risk of late or incorrect statements, reports, and tax filings.
More importantly, you don’t want to leave tax savings on the table. A common mistake we see rental property owners make is the mistake of not taking advantage of all the tax benefits that are available to them.
When you rent out property in San Mateo, you’re required to include all the rental income you earn on your tax forms. That’s taxable income. But, you can also take a number of deductions that pertain to your rental property. These include:
- Maintenance costs. When you pay for labor, materials, and supplies to make repairs to your investment property, you can deduct those costs as losses on your taxes.
- Mortgage interest. When you’re paying interest on the loan you used to acquire your investment property, that interest is tax deductible.
- Professional fees. Working with a property manager to help with your accounting as well as the leasing, management, and maintenance of your rental property will result in a monthly management fee. It’s completely tax-deductible. So are other professional fees such as the commissions you might pay to real estate agents when your property is being leased or the attorney fees you pay during an eviction.
- Depreciation. The IRS allows you to write off the depreciation of your rental property.
This is another good reason to hire a professional San Mateo property management team to handle your property’s books. You need accurate work that’s done on time. Late payment fees and penalties are going to hurt your cash reserves and keep you playing catch-up, which isn’t good for you or your investment outcomes.
Property Management and Accounting Technology
Property management technology and software has come a long way over the last five or ten years.
Most of the property management tech we use is integrated with our accounting software.
If you do not have a tech-driven and automated system in place for yourself, working with a company that does have such systems can save you a lot of time, money, and frustration.
We have invested in some of the most innovative technology that’s available. One of the areas in which it provides the most help is accounting.
This is technology that’s cost-prohibitive for most rental property owners to buy themselves. It’s also not necessarily easy to install yourself. You might not have the training required to use it effectively and to its full potential. You’ll need to sync it and integrate it with any existing platforms and systems you might have.
Outsourcing the accounting work to your property managers can ensure you’re getting access to the best technology that’s available. These tools will provide more efficiency, better documentation, and extra transparency. You can expect to solve complex problems quickly and easily. Resources such as online rent payments will lead to on-time collections. You won’t have to wait for a paper check to arrive every month; your rent will be deposited right into your account via ACH transfer.
With accounting technology comes online safety. You can expect strict safeguards and confidentiality as well as controlled access and backup. You want to protect your finances from fraud and hackers. Working with a property manager will bring you that extra peace of mind. Security protocols are part of every system we use.
Efficiency and Accuracy Means Fewer Accounting Errors
A property management accounting team can increase your efficiency. Bills will be paid on time. Income will be tracked, and budgetary estimates will be made. You won’t find yourself trying to remember if you paid the landscaping bill this month. It’s all being handled for you.
Outsourcing the accounting to your property manager will deliver more time to you and more efficiency to your process. You will no longer be responsible for:
- Managing the security deposit.
- Collecting rent.
- Paying vendors and maintenance professionals.
- Reconciling your books.
- Putting together a budget.
When you have an accounting professional do all of this for you, it will result in better results and high quality work that’s free of errors.
If we haven’t convinced you yet that outsourcing your accounting work is the best thing for your rental properties in San Mateo, consider the bottom line: handing over your accounting needs to a professional management company can save you money and protect you against expensive mistakes.
You’re getting more than accounting – you’re getting systems, professional expertise, and technology that makes communication and accountability better.
Working with a property management company makes sense for your investment property. You’re getting high quality leasing, management, and maintenance support. You have access to great vendors and you don’t have to worry about tenant relations.
Why hire an accountant or a bookkeeper in addition to a property manager? Instead, keep all of those functions in one place. Look for a management company that’s also very good with accounting.
Transparency and Peace of Mind
Maybe you’re still worried about the vulnerability that can come with someone else managing your finances.
Luckily, most property managers are very good about being transparent. You’ll be able to see everything we see, thanks to the online portal that’s provided to owners. You can log in at any time of the day or night to see exactly where you stand. On the portal, you’ll see:
- When rent was paid.
- Which maintenance invoices are still outstanding.
- When lease renewals are due to come up.
- Income and expense statements.
- Financial reports for the month, quarter, or year.
- Tax forms like 1099s.
This is all part of how we communicate with you about your accounting functions and financial records. The online portal means that you have access to everything.
If you have accounting questions, we’re prepared to answer them.
Experienced rental property investors will tell you that having a property manager take care of your accounting is a great way to enjoy peace of mind and better results. You’ll find there’s more organization and documentation, and less of a risk for mistakes.
Would you like to discuss this further? Please contact us at Sharevest Property Management, and we’d be happy to talk about your San Mateo investment properties.