No matter the type of property you own, from homes to vehicles to luxury items, owning these assets comes with the responsibility to keep important documents. Keeping records for your real estate holdings, such as a beachside condo rental unit, a summer vacation home, or even a vacant lot for your next dream home.
Rental Properties
It is imperative to retain documents on each rental property for tax purposes, tenant relationships, and maintenance. You should also keep all important documents pertaining to the purchase of your properties (such as loan information/mortgage paperwork).
If you’re a self-managing landlord listing your property on VRBO or Airbnb, you’ll need to keep records regarding repairs, improvements, and property taxes while you’ve owned the property as well. Retain copies of the signed rental agreements to protect your claims of damage or forfeited deposits. Do you enjoy staying at your rental as a guest? Then, you’ll also need to keep a calendar of your stays. Come tax time, your tax preparer requires an account determining the number of your personal use days vs. rental days. This record is so much easier to track throughout the year vs. receiving that dreaded inquiry from your CPA. For long-term tenants, keep track of move-in and move-out dates over time, as these dates become blurry in our memories.
If your rental property has professional management, such as Vacasa or local experts, keep your property management contract accessible. While you are less likely to encounter an emergency maintenance issue, you may find yourself playing go-between with your property management company and your insurance carrier should a disaster strike. Keeping detailed records on a rental home can also help your insurance company should the need arise to file a claim if your property is damaged.
Your Second Home
If you have a second home that you occupy, keeping cloud-accessible records becomes even more critical. Otherwise, you are more likely to find yourself at the other location where your paper records are located.
Just like keeping records for your primary residence, second homes are frequently located in destination settings such as waterfront views or mountain terrain. With those serene views come specialty suggestions, like maintaining flood or windstorm insurance documents.
Do you retain a caretaker for the property? Request detailed records to ensure upkeep and maintenance efforts stay on schedule. HOA requirements are also important, ensuring you maintain your property meeting the HOA specifications. A complete list of all service providers and account numbers is important to keep accessible, regardless if this is a weekend getaway or a seasonal stay. You might need to refer to these documents or lists whenever you’re at home.
Keep Rental Property Records Separate
If you own rental properties or additional homes, be certain to keep these records separate from your primary residence records. Whether your daily money manager keeps the books for your rental properties or you’re outsourced to a professional management company, these documents should be kept in their own dedicated file for ease of reference and filing during tax season. When it’s time to sell off one location, you’ll thank us for these tidbits of knowledge!
Are your rental properties considered a business? Not sure if you qualify as a real estate professional business? Check out this article from Carr, Riggs, and Ingram CPA for further guidance.
In short, keep your physical documents for rental properties in a safe place, upload them to the cloud, and separate them from all your personal residential records. This helps in the long run for tax purposes and keeping on top of property maintenance and upkeep.
If records for your rental properties have become too cumbersome to keep track of, call us today. At Organized Instincts, our seasoned team of daily money managers will help you keep your rental records separate and secure. Schedule a free consultation today and learn how we keep it real.