Letting Agency Software: Avoiding The Traps

Question: If your rental charges are less than the mortgage for your property

, should you declare your income? This is the usual trap that most landlords fall into. They believe that since they are not making any profitsand are in fact taking money from their own pocket to cover the coststhey are excused from doing so. In real property, documentation is everything. You can do it manually, hire an accounting for or utilise a landlord software to make sure all your papers are in order.

Avoiding the traps

Failing to document the rental expenses and income, they could miss out on the shortfalls that they could carry in the next fiscal year or until they turn up profits. They could actually cut the necessity to pay tax when they start to yield returns in investment. In the mortgage, only the actual interest is allowed to be taken from the rental income. The difference constitutes the profit which needs to be declared and taxed. A landlord software can help rationalize your income, expenses and keep track of any spillage that can drain your coffers.

Expenses that are considered deductible

In the mistaken belief that they can save on cost, landowners totally ignore the need to hire letting agencies or accounting firms to handle their finances. In some instances, even the monthly statements of these agencies do not list down these most ignored deductibles: the depreciation of the property, including the fixtures (typically a 10% downgrade each year); insurance on the property and even the furniture inside (You can also claim insurance to cover the unpaid rent in case the renter bails out); advertising costs if any; cleaning and maintenance (particularly when you own a garden or law for example); local fees and charges. A letting agency software, however, can do all these for you and even notify you when there are bills that are due.

Making life easier

With the use of these analytics solutions, you can get a quick overview of the money you put into the property and the rent that you collect so you can immediately assess the profitability of the enterprise and address the gaps. With the letting agency software,the entire roster and back payments of your tenants will be quickly laid out allowing you to make the necessary collection arrangements. You can text, email or call up the individual or company to demand your rent.

by: landburg

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