Major Accounting Principles to Effectively Run Your Property Management Business

accounting principles

If finances aren’t your main priority as a property manager (after all, you have a lot of other things to worry about), you probably have a hard time keeping them on track.

But it doesn’t have to be a big, difficult job.

These quick tips will help you learn some important accounting principles that will make your job a bit easier.

Keep Every Property Separate

As much as you want to lump everything together, don’t. Despite what you might think, it probably won’t make anything easier.

You do need to have an overall budget for your properties, but each property should also have its own, much smaller budget line. This also means giving each property it’s own line-by-line budget items.

Why?

Because it will help you accurately track your profit (and your loss) and stay up to date with your income ratios. Not only will this bring successful accounting, but it will also keep you protected should any legal issues come up.

Your Documents Should be Organized

Messy documents mean sloppy accounting. Everything should be organized, clear, and easy to find.

Should a tenant challenge a charge (which they have every right to do), you need to have all relevant documents on hand to prove that charge was fair.

This means you need to know what the typical rates for services are in your area. You should only charge as much as a professional in your community would charge for the same service.

So if a tenant calls about broken sink (or something similar) and you decide to fix it yourself, you can only charge what a professional would charge to do the same job. If the professional could finish the job in an hour but it took you three hours, you can still only charge for that one hour.

Keep Meticulous Records of Everything

Each property needs to be declared on a tax return, regardless of whether it was profitable or not. When you declare it on a tax return, you can offset it against future profits.

These are some of the documents that need to be kept organized.

Budget Tax Payments in Advance

Every time you consider a new investment, you should budget in your tax payments right away.

A good way to do that is putting aside at least a quarter of your profit from each property every month. When it comes time to pay taxes, you won’t have to flounder and try to find the money somewhere.

But the exact amount you put aside depends on how much profit you get from what things. For example, if you have a lot of other earnings from other sources, you may have to put aside even more than a quarter of your property profit.

Make Sure You Stay Prepared with Good Accounting Principles

Proper Accounting principles make sure you stay prepared for anything that might crop up during the year. This includes taxes, legal problems with tenants, and other issues.

Keeping your documents clear and organized is a must. Without that, it will be hard to keep track of profits and loss from all your properties.

Want to make your job even easier? Then you need to look at these apps every property manager should have.

Genius Marketing Techniques for Your Property Management Business

marketing techniques

As a small business owner and property manager, proper marketing is essential to your success.

In the age of the Internet and social media, however, marketing is trickier and more confusing than ever. There are endless channels that could connect you to potential tenants, but not all of them are worth your time or money.

Having a strong grasp on small business marketing will significantly increase your exposure, and may enable you to grow your business beyond what you originally thought possible.

It’s important to keep in mind, though, that you can’t do everything. Not all marketing techniques will work for every business. It’s better to do one or two things really well, rather than spreading your marketing strategy too thin.

Below, we’re reviewing the top marketing techniques that could work for your property management business. Read on to learn more!

1. Create a User-Friendly Website

When it comes to successful marketing techniques, the most important tool in your arsenal is a great website. Any prospective tenant who is interested in your property is guaranteed to look you up online. If they like what they see, they’ll continue to engage with you. If they don’t, that’s where the interaction will end.

Consider working with a UX designer to ensure that your website is as user-friendly as possible. Your site should be easy to navigate, and any prospective tenant should be able to find the answer to any question they might have.

2. Utilize Social Media

Modern technology, like apps and social media platforms, are essential for property managers. Even if you don’t think of yourself as a lifestyle brand, it’s important that your audience is exposed to your business through the social media channels that they visit every day.

Keep in mind, that doesn’t mean that you have to be on every social media platform all the time. Look into the most popular platforms — like Twitter, Facebook, Instagram, and Pinterest–and pick one or two. Think about what makes sense for your business, your brand, and how much time you’ll have to commit to it.

3. Be Strategic About Promotions

Offering discounts and deals is a great way to attract attention and new business, but you have to be strategic about it. If you offer too little, people won’t find it worth their time. But if you offer too much, it may hurt your business in the long run.

Take a good look at your financials and come up with a promotion that is beneficial to your audience, and sustainable on your end as well. Deals for new business are an obvious way to go, but also think of how you can reward longtime tenants. Show them that you appreciate their loyalty, and they may reward you by spreading good word of mouth.

Ready to Start Implementing New Marketing Techniques?

Before you begin putting your marketing plan into action, it’s important you define your goals. These will help you identify what marketing techniques are worth your time and money. You can keep evaluating and tweaking until you find the plan that works for you.

Want to learn more about marketing your property? Contact us today!

Top 5 Apps for Property Managers

house company create internet website online

Did you know that 34% of the houses in the US are occupied by renters?

And that vacancy rates are very low — about 7%?

It’s a good time to be a property manager.

Although the market is ripe for those in the business, the higher amount of renters means a much higher workload.

Being highly organized has always been a hallmark of great property managers – but now it’s a necessity.

To help you out, I’ve put together this list of necessary apps for property managers.

1. Property Buddy

There are lots of apps to help you manage all of your properties, but few are as well-designed as Property Buddy.

The first thing you’ll notice is the sleek, elegant user interface. All of the features are intuitive – you’ll become familiar with the software quickly and easily.

It also has a dashboard that gives you a quick overview of the status of your properties.

Admittedly, it’s not quite as powerful as some other apps for property managers. It lacks a few features found elsewhere. It more than makes up for it with its simplicity and ease-of-use.

2. Todoist

Todoist is a personal favorite.

It’s an app that helps organize your life through, you guessed it, to-do lists.

While it wasn’t designed for the purpose, it holds up well amongst other apps for property managers.

Todoist allows you to create tasks, set them to recur, set reminders – the whole 9 yards. You can also sort them into categories, which helps organize your days further.

The unique part of Todoist is the gamification aspect. You earn points for completing tasks (you can assign different priorities or difficulties to them) and level up.

While you don’t actually get anything from leveling, it does encourage you to stay on top of things.

3. Hello Sign

Simple, but one of the most critical apps for property managers.

Hello Sign lets you sign, scan, copy, and send documents from your phone.

When all of your documents are stored online, being able to sign them without printing is a godsend.

4. SAP Inventory Manager

As a property manager, you likely have a fair amount of inventory beyond just the building in which your tenants are housed.

Keep track of those with a SAP Inventory Manager.

Big appliances like washing machines and refrigerators are hard to forget about, but what about that dehumidifier?

It’s important to keep records in case you have to, God forbid, evict an angry tenant and things get messy.

5. LastPass

I don’t know where I’d be if not for LastPass.

LastPass is a password managing program. Gone are the days of remembering a password for every site, app, and program. You only need to know one – then it remembers the rest for you.

LastPass will auto-generate hyper-secure passwords for you — you only need to make the master pass strong.

Having security is a necessity as a property manager since you handle sensitive information for clients.

Download Apps for Property Managers and Organize Yourself Today

“For every minute spent organizing, an hour is earned.”

-Benjamin Franklin

Now step up your game! Organization allows you to manage multiple properties like a pro!

Are Smart Home Devices Worth the Investment?

smart home devices

Smart home devices are the future of household automation. The Internet of Things – as people have been calling it – is a massive industry that analysts predict will reach nearly 30 billion household units by 2020.

The future is in home automation, but is it worth investing in these devices now? We would argue that you should.

Saving Time

One of the main reasons people invest in smart home technology is because it makes their lives easier. Instead of searching for the remote, you can turn on your TV with your voice. When you want to know what the weather is going to be like, you can ask your virtual assistant, and they’ll have it for you.

With a smart device, you can even keep your schedule together and have the assistant read it back whenever you need a reminder. These devices make life easier, which is one reason they boost the property value of homes.

Saving Money

Although it will cost some initial money to get the devices set up in your property, you could find that you save money once you install them. Nest – a smart thermostat company – completed a study that showed their customers saves 10%-12% on their heating bills and up to 15% on cooling once they added the smart thermostat to their home.

With this in mind, the smart thermostat will pay for itself in two years or less. These thermostats are relatively cheap, but if you want to add to your savings, you could purchase a smart washing machine or smart lighting setup.

Both of these systems have more initial cost, but once you have them in your home, you’ll start seeing the savings every month.

Keeping You Safe

Smart home devices also help make your or your tenants safer, which can translate into more savings on insurance premiums as well. Devices like smart smoke detectors can save you money on your premiums every month, as well as make sure your property is safe from fire, carbon monoxide, radon, and other threats.

Additionally, smart security systems will keep your property safe from burglars, alerting the police as soon as someone nefarious enters the property. Top-of-the-line homes require the best security systems, and these smart home devices don’t cost as much as you might think.

Selling a Smart Home

Smart technology adds value to a property. 64% of millennials think that this technology makes homes safer and more enjoyable, and they’re willing to pay.

Smart technology is the future, and you can outfit your home with these devices for relatively cheap. Once they’re in there, they’ll boost your property value and make it easier for you to sell the home when the time comes.

Adding Smart Home Devices to Your Home

Whether you’re living in the home or renting it to someone else, smart devices make the property more valuable, safer, and more cost-effective. Smart technology is the future, so invest in it now and make it that much easier to sell the property when the time comes.

Need help with your property management? Click here to learn more about our company!

Top 5 States Without Property Tax

states without property tax

Real estate taxes can be a major strain on households all across the country. Although there are no states without property tax at all, you can get pretty close.

Living in a state that only takes a small percentage of your home’s value as taxes can save you money on a yearly basis.

So what states should you consider if you’re looking to save some money on your property taxes? Keep reading to find out.

Hawaii

If you’re looking for states without property tax, you can’t do any better than Hawaii. Their tax rate is 0.28% of the average home value. Since the average home in Hawaii costs $500,000 that makes the annual taxes about $1,389.

However, Hawaii also has the second-highest income tax in the nation. This gives it a relatively high overall tax burden. This leads to high prices on consumer goods and a harsh environment for new businesses.

Alabama

Alabama’s property tax sits at 0.43% of the average home value. In Alabama, the median home value is only $122,700. That means that their property taxes come out to just $532 a year.

Alabama is truly a state that makes due with little taxation. They back up their low property taxes with a sales tax that is two percent less than the national average and a personal income tax that varies between 2 and 5%.

Louisiana

At 0.51%, Louisiana’s property taxes are the third-lowest in the nation. The median home value is $140,300 and property taxes annually on that home come out to just $714.

Louisiana also currently has programs in place offering tax breaks to landowners who are completing renovations on properties that have fallen into disrepair after not being maintained annually.

Their income tax is between 2 and 6% and many of the programs in the state are subsidized by the federal government. This gives Louisiana the opportunity to offer a lower tax burden overall.

Delaware

Delaware’s property tax rate is only .04% higher than Louisiana, sitting at 0.55% of the average home value. In Delaware, the median sale price for a house is $226,200 which means the annual property taxes would be about $1,240.

Unfortunately, Delaware is currently facing budget constraints. They plan on raising property taxes as a way to supply new revenue to the state. Homes in Delaware are also subject to county, school district, and vocational school district taxes.

Washington D.C.

Washington D.C. has a property tax of 0.57% of the average home value. The median home sells for $470,500 and the property taxes on that home would be $2,693.

Federal taxes in D.C. more than make up for this low property tax rate. Their tax rate ends up being one of the highest in the nation once everything is taken into account.

Other States Without Property Tax

Trying to find states without property tax is like looking for a unicorn. But by looking for the one with the lowest percentage of total home value, you can save a lot of money annually.

But no matter how low the property tax, you still need to take into consideration the other taxes that will need to be paid if you live in that state.

For more helpful information contact us today.