We explore the best way to manage and track maintenance expenses to ensure you never miss a deductible expense again.
Managing maintenance requests for a property is one of the most dreaded aspects of being a landlord. Properties need constant upkeep, and this can quickly become expensive. As a landlord, this expense falls, almost entirely, on you. And if you have tenants who don’t immediately inform you of the maintenance needs of your property, then these maintenance expenses can quickly spiral out of control
Maintenance issues need to be handled quickly, and the jobs should be done properly, to make sure that the property remains in good habitable condition. Thankfully, most maintenance expenses are tax-deductible. But in order to claim these deductions, you must keep detailed and accurate records of everything about your property and everything related to those maintenance expenses.
In order to manage your rental property, effectively, and maximize your tax deductions you must keep detailed records of everything relating to your rental property. In general, the documents that you need to keep track of include:
In order to make the most of the tax-deductible expenses associated with the maintenance of your property. You should also keep ongoing day-to-day management documents relating to property expenses. For example,
When it comes to tracking your maintenance expenses in particular, you must keep a careful record of all property maintenance and repairs that are undergone, who was contracted, and when the maintenance was requested by the tenant.
Additionally, you should keep a copy of all receipts associated with any materials or payments made in relation to that maintenance,
Tracking maintenance expenses doesn’t have to be difficult. There are numerous solutions that have been developed in order to make landlord’s lives easier. The first thing you need to do is find a digital solution that allows you to keep all of the salient documentation in one place.
When looking for a digital solution such as a property management system there are a few key things that you should look for.
A mobile app will allow you to track your expenses on the go and in real-time. Meaning, if you go down to the hardware store and purchase some lumber for a maintenance job. You can instantly enter that expense into the app.
One of the biggest issues faced by landlords is when they leave their expense tracking to the end of the month, or worse, to the end of the year. This can often lead to expenses being missed and overpaying taxes.
Do away with your paper receipts, your folders, and folders of printed paper. Instead, snap a picture of the receipt, using your property management software to capture a digital likeness and store it securely online, easily accessible, and well organized where it won’t get lost.
Some maintenance expenses recur on a regular basis. For example, you might have a gardener or landscaper who goes to the property once a month or once a quarter to do general yard maintenance work.
Your property management system should allow you to enter that recurring expense, so you can set and forget.
The best rental accounting systems will allow you to connect your bank account, so you can access to view and reconcile transactions from inside their software. This removes the need for digital. This removes the need for manual data entry, which is both time-consuming, and often erroneous.
Not all maintenance expenses are to be paid by the landlord, property management software should allow you to assign maintenance expenses to a tenant and send invoices and receipts to your tenant.
The software you use should allow you to instantly generate a range of professional reports so that you can see all of the income and expenses for that tax year, as well as historical income and expenses. These reports should be easy to export in various formats and share with your CPA or accountant, allowing you to accurately and easily file your Schedule E and claim all the relevant tax-deductible expenses.
By using purpose-built property management software like Landlord Studio, you can manage your maintenance from your smartphone. Our intuitive property maintenance management system allows you to record and prioritize tasks, track maintenance progress and easily communicate updates with tenants.
Not to mention the fact that you can take advantage of additional features like receipt scanning, expense tracking and reporting.
Good bookkeeping is absolutely essential if you are to claim your tax-deductible maintenance expenses. Adopting a software solution that makes this easy, and allows you to manage your expected income and expenses on the go, and in real-time will not only limit the amount of time that you have to spend each month manually entering the data and filing through paper receipts, but it will also help you streamline your property management as a whole.
There are numerous additional benefits associated with property management software which include rent collection tools, tenant screening tools, and even automation tools. By using property management software to track your maintenance expenses, you can save time and money so that you can scale your property portfolio and build wealth.
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