Being a landlord is not for the faint of heart. It can be enormously lucrative, but it also comes with a lot of challenges and moving parts.
If you don’t have a plan to stay organized, you could easily find yourself spinning out of control.
Five Tips for Masterful Organization
Being organized simply means having a system for arranging information in a clear and documented way so you’re able to grab the right information when you need it. As a landlord, this means having all your paperwork, legal documents, lease agreements, expenses, and tax records arranged into a logical and constructive order.
Not sure what that might look like in practice? Don’t worry – we’re going to show you! Here are a few of our favorite tips.
- Create a Systematized Cloud Drive
There’s nothing wrong with keeping physical paper files, but there’s an excellent case to be made for going paperless. Aside from the eco-friendly benefits, a digital approach ensures you always have access to the right files wherever you are.
With cloud technology, you can store a document in a single folder and access it from any device or location in the world. You’ll have to create a system that works for you, but we recommend creating a dedicated cloud drive for your real estate investments.
Then, within that drive, give each property you own its own folder. From there you may create subfolders inside the property folder for such items as lease agreements, accounting, property repair receipts, warranties, etc.
- Set Up Separate Bank Accounts
From an accounting perspective, it’s extremely helpful to keep separate bank accounts for personal expenses and rental property expenses. In some cases, investors find it helpful to keep a separate bank account for each individual property.
This can make accounting a breeze, because you don’t have to track down expenses from multiple cards and accounts.
- Hire a Rental Property CPA
Rental property accounting isn’t the most complex numbers management in the business, but it certainly demands accuracy. For starters, you’ll have to determine whether you want to use a cash or accrual method.
Second, you’ll need to choose a system for keeping your books. Third, you’ll need to figure out whether you want to do it yourself or hire someone else to handle it on your behalf.
If you choose the latter, you might find the most affordable option would be to hire a property management company that includes accounting as part of its services.
- Triage Your Email Inbox
It’s easy for your email inbox to become a morass of spam and promotional emails. If you aren’t intentional about managing your inbox, critical emails can get buried beneath all the other traffic.
This is why it’s wise to have a simple triage system for managing email overload. With an email triage system, each message you receive ends up in a specific folder by the end of the day.
This triage system from James Parsons of Emailmate is a good one. Give it a try and see what you think.
- Clear Your Desk at the End of the Day
It’s absolutely imperative that you keep a clean desk. Not only does a clean, organized desk make it easier for you to find things, but it fosters a clear and focused mind as well.
As WSJ bestselling author Joshua Becker writes, “A cluttered office desk is filled with potential distractions. Sticky notes, business cards, file folders, and uncompleted projects all clamor for our attention every moment of the day. Removing them and creating a minimalist desk allows our mind to better focus on the most important project of the moment: the one you are working on.”
The same goes for your “mobile office” – i.e., your car. Keep it clean and your mind will remain clear and focused.
Avoid Falling Behind
It’s not always possible to be perfectly organized. There will be times when you lose a document, misplace a report, or don’t have the time to organize a stack of disparate items in the moment.
Nevertheless, your biggest goal will be to avoid falling behind. One misplaced document can easily lead to two, and then to three … and you know where that goes.
The sooner you get your physical and digital paper trails in order, the easier it’ll be to stay on track. The best time to take action is now!