The year is coming to an end and at some point you will need to sort through the piles of paperwork that accumulated on your table. It might be tempting to just put everything in one big box and forget about it, but at Bay Management Group we strongly recommend you to take the time to organize the paperwork pertaining to property management.
You never know when you might need certain documents, so having them at hand always helps. You don’t have to keep everything, but be sure to save some space in a filing cabinet for the documents regarding:
It’s a good practice to set up a folder for every tenant to keep all the related information, such as:
- Reports of background checks and references
- A copy of contract and everything else that has tenant’s signature on it
- Proof of receipt or transfer of payments to and from the tenant with dates and amounts of transactions
- Before and after tenancy pictures of your property; pictures documenting damage or supporting loss of security deposit
- Complaints from and/or about the tenant
- All documented correspondence with the tenants, such as printed out emails or formal letters
- Your personal notes about a tenant
These documents may come in handy if your former tenant decides to rent from you again. You’ll be able to access the payment history and asses tenant’s performance to decide whether you want to rent to him again. Also, if someone requests references about your former tenant or if a tenant attempts to seek compensation from you based on false claims – you will have the paperwork to back up your statements.
Property records are also important and should be arranged by property and kept in a secure place. Some of the documents you should consider saving include:
- Property ownership, blueprints and insurance documents
- Licenses and permits
- Property inspection reports
- Purchase receipts for new appliances or other items for the property
- Property maintenance and repair records and associated receipts
As one of the leading Baltimore property management companies, we think that keeping a detailed account of how much you spend on each property is crucial for calculating your return on investment. Being a landlord is a business, and if you want it to continue to be profitable, as well as to adhere to all the laws and regulations, you should keep and evaluate your financial documents, such as:
- Tax returns and year-end financial statements
- Deeds and mortgage paperwork
- External and internal audits reports
- Expense reports
As handy and talented as you might be, you probably had to outsource property maintenance or other services at some point. Make a separate folder to keep a tab on every contractor you have hired to work on your property. If they did a great job, you know who to call in the future if a similar issue occurs. Keep this directory updated and you will end up with a list of reliable craftsmen that can do the job right. Building relationships with contractors may also earn you discounts and special treatment.
How long should you keep all these papers? The answer is anywhere from one year to forever. Of course, such crucial documents as mortgage and ownership paperwork you’ll need to hold on to, but something less important like receipts can be discarded after one year.
Just in case, make digital copies of everything you are planning on throwing away. Keep them on an external hard drive, so that you won’t lose everything when a computer crashes. And remember, if that sounds like too much work that you don’t have time for, your local Baltimore rental property management company can do all the bookkeeping for you!