3 reasons to hire a bookkeeper when managing rental properties

I recently had the opportunity to sit down with Toni Wood of Elite Bookkeeping Plus. After many years of managing the office and accounting for a local realtor and auctioneer, Toni decided to follow her dream of owning her own bookkeeping business. With the flexibility provided by technology and several property managers as clients, Toni saw an opportunity to make her side hustle into a full-time job by providing bookkeeping services to landlords, property managers and small business owners.

Although Toni and I initially sat down because she was gracious enough to collaborate with me on RentMindMe, our conversation flowed to the topic of time and the benefits of having the right people in your corner to make your business successful. Teaming up with the right people is a theme I’ve picked up on while listening to real estate podcasts, researching how to get started in real estate and how successful businesses have been built.

As you think about how to scale your own real estate portfolio, the first step is thinking of yourself as a business, not a hobby. Establishing a structure to operate in will help you follow a predefined path; keep you organized and assist in decision making. Tapping into the expertise of a bookkeeper like Toni can help you get started on the right foot.

In the interest of your time, here are 3 reasons you should hire a bookkeeper when managing rental properties.

Reason 1: Establishing the right approach early is critical

Although you may start out small, having a bookkeeper will help you establish your accounting practices, setup some general approaches to organizing your files to help you reduce the time spent digging through a shoe box or stack of papers when it comes time to file your taxes. Start establishing your processes as early in your business as possible so that as you scale the practices you established early on are habit. Waiting until you think you need help will often cost more because a bookkeeper will need to dig in and potentially correct the historical work you have neglected.

Reason 2: Being organized helps you scale

If you are working a full-time job, balancing family and managing rental properties, its nice to be able to offload some of the work to a knowledgeable partner. The services a bookkeeper can provide you might include setting up a chart of accounts, managing your bills, Accounts Payable, Accounts Receivable, monthly reconciliation or other administrative services like setting up forms or spreadsheets to keep you organized.

Lenders are going to investigate your financials when you are seeking funding. The more organized you can be the more effectively you can communicate and increase the likeliness that you’ll receive the financing you need.

Reason 3: Customizable service offerings

Just because you hire a bookkeeper doesn’t mean it has to break the bank. You’ll want to find a bookkeeper who is focused on the value they provide as opposed to focusing on their hourly rate. By customizing a plan that works for you to get the most out of the relationship, you can ensure that you are giving the right attention to your books and accounting practices.

I have heard several landlords tell me that they take 2 to 4 weeks at tax time and go into hiding so they can catch up on the work that they put off all year. Imagine if they had delegated that work in chunks over the course of the year? They wouldn’t have to go into hiding and deal with the overwhelming pile of receipts and records they have accumulated over the prior 12 months.

Additional food for thought

Imagine how organized your business could be as a result of automating your rent billing and having a teammate in your corner to manage your books. Working smarter not harder pays off in the long run. For some of us the letting go is the hardest part but there is value in letting go. Maybe it frees you up to spend more time with your children or grandchildren, maybe it allows you to pursue a real hobby (not your rentals – those are a business) or maybe you start another business you are passionate about. The possibilities are endless, and you can pretty much guarantee you are going to stress less.

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