Landlord Organization/Filing System

General Landlording & Rental Properties
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Landlord Organization/Filing System

Victor Chico
Investor · San Juan, PR · Member since 2013 · 71 posts · 50 votes

Greetings!

I am an accidental landlord hoping to become a real estate investor. I have several properties which I inherited. I have been actively reading and learning about rental properties.

I would like to hear opinions on documents that a landlord should have/keep and how to organize them properly.

As of now, I have 7 tenants. I have zero information on 6 of them except for their names. All of the tenants are currently section 8.

My plan is to have a system such as:

- Physical files - I have some idea on how to organize them, but would like to hear yours (i.e., one per tenant, one per property, etc). What should be in them?

- Digital files - A scanned copy of the paper files in a Dropbox folder, so I can share it with my partner

- Financials/Ledger - Use Quickbooks so I can quickly generate reports and also be able to input info from more than one place. I usually handle contract renovations, taxes and similar expenses. My partner lives about an hour away and he handles repairs and that sort of stuff.

I'll probably expand on this latter (i.e., give concrete examples of what I am doing or plan to do), but for now I wanted to get the ball rolling and hear your opinions on the matter. I have a very improvised system. I KNOW that if I want to grow I need a system that can grow as my number of properties/tenants increases and can be taught to others who I may have to bring in to help.

Thanks!

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Ann Bellamy
Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
13y

Whether you keep paper or scanned records, isn't as important as the fact that you keep records. I'm in the process of converting to scanned records, and my scans will mirror my hard copy files.

So on the hard copy side:
1 file drawer per building, includes folders for acquisition docs, mortgage statements, tax bills, insurance bills, improvements (add to basis) and a file folder for each tenant. In the tenant files, I keep application, lease, receipt where I deposited security deposit, correspondence, etc.
2. Files for contractors such as snow removal contracts, carpenters, log for handyman, water system maintenance (I own a public water system, which most people probably don't have to bother with), etc
3. Accounts payable for each building separately, so I have the bill and the note when it was paid
4. Bank statements for each separate bank account. Since my properties are mostly in separate LLC's, I have separate bank accounts and credit or debit cards for each company. Although it is cumbersome to track multiple bank accounts, my bookkeeper doesn't have to guess which property the expense goes to, because if it was on the credit or debit card for that building, then the expense is charged to that building.

I personally use Quickbooks, but used Quicken for a long time.

I strongly recommend that you contact each tenant, knocking on the door if you have to, and get contact info. If you don't have rental records or leases, they probably don't either, but it doesn't hurt to ask. Present yourself as the manager if it's not too late, not as the owner. You'll get more cooperation if you are a working guy than if you are a building owner. If it's too late, and they know you're the owner, then just be upfront about it and ask for the information. Don't forget to ask them for receipts for security deposits. You may not get much from them, but a little bit is better than nothing.

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  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    13y

    Hey Victor Chico - We have physical files for each property - not for each tenant. When a tenant moves out, they stay in the file and a new file is added in front. It seems to work for us.

    I do very little with digital - though I'd like to do more. Right now i use Google Drive to have my blank leases handy if I'm out and about (and need to print one at Staples.)

    We just use Excel, but we're planning on doing some Quickbooks stuff soon. I'm also testing out Buildium right now to see how it works.

    Anyone else?

    Podcast Guest on Show #92
    0Reply
  • Prashant P.
    Real Estate Investor · Philadelphia, PA · Member since 2010 · 283 posts · 81 votes
    13y

    I keep hard copies and scanned PDFs of important documents like leases, rental applications, and non payment letters.

    Like Brandon, I just use Excel to capture my costs.

    I also use my iphone. I use a scanning app to take a picture of reciepts and bills for different properties. They save as a PDF and you can label them. Then when I have time I go through and enter the expense into Excel. Helps cut down on paper.

    0Reply
  • George Paiva
    Investor · Milford, CT · Member since 2012 · 592 posts · 285 votes
    13y

    I keep hard copy files for each tenant, each property. I have a quick one pager contact sheet for each tenant.

    Started going digital last year. Scan to PDF all important docs. All contact info is sync'd with my Blackberry.

    I wanted to look into the NEAT system for paper receipts but haven't had the time yet.

    I use Quicken's Rental Property Manager for Accounting. Its good enough and easy to use for the 4 properties I have. Last year I kept all properties in separate files. I may merge it to one portfolio in Rental Property Manager but I also don't want to fall into "co-mingling of funds"

    Welcome to the group, I too was accidentally landlorded... But came to enjoy it!!!

    0Reply
  • Andrea M.
    Real Estate Investor · Hampton, VA · Member since 2012 · 562 posts · 109 votes
    13y

    I also keep hard copies of all documents : rental application, proof of income, photo id and things of that nature, currently use excel to track rental payments and document any notes as far as maintenance request and late payers. But seems as though since you have inherited this properties, you may need to start the process with all the tenants based on your rental application packets.

    0Reply
  • Pat L.
    Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    13y

    I have separate escrow/repair accounts by LLC EIN #'s @ the bank for each property. We had a vacating LTO withdraw cash from an account they deposited into for several years. In fact the assistant bank mgr approved the withdrawal because they were the only people he had seen use the account. We got it all back but EIN #'s make it safer esp when you have 40-50 accounts.

    I scan all receipts & documents using NEAT as it has great reporting functions that also allow files to be imported into the more common accounting packages. The search filter is great.
    When I sat through that 3 day IRS audit they loved the NEAT reports & rarely looked at the supporting receipt printouts. Admittedly I printed several receipts to a page making it a 'small print' issue.

    I still use excel spreadsheets to run the income etc for every property from day one.
    Meanwhile my wife still likes to keep separate files & hard copy accounting as a redundant backup (but it keeps her busy).

    0Reply
  • Ann Bellamy
    Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    13y

    Whether you keep paper or scanned records, isn't as important as the fact that you keep records. I'm in the process of converting to scanned records, and my scans will mirror my hard copy files.

    So on the hard copy side:
    1 file drawer per building, includes folders for acquisition docs, mortgage statements, tax bills, insurance bills, improvements (add to basis) and a file folder for each tenant. In the tenant files, I keep application, lease, receipt where I deposited security deposit, correspondence, etc.
    2. Files for contractors such as snow removal contracts, carpenters, log for handyman, water system maintenance (I own a public water system, which most people probably don't have to bother with), etc
    3. Accounts payable for each building separately, so I have the bill and the note when it was paid
    4. Bank statements for each separate bank account. Since my properties are mostly in separate LLC's, I have separate bank accounts and credit or debit cards for each company. Although it is cumbersome to track multiple bank accounts, my bookkeeper doesn't have to guess which property the expense goes to, because if it was on the credit or debit card for that building, then the expense is charged to that building.

    I personally use Quickbooks, but used Quicken for a long time.

    I strongly recommend that you contact each tenant, knocking on the door if you have to, and get contact info. If you don't have rental records or leases, they probably don't either, but it doesn't hurt to ask. Present yourself as the manager if it's not too late, not as the owner. You'll get more cooperation if you are a working guy than if you are a building owner. If it's too late, and they know you're the owner, then just be upfront about it and ask for the information. Don't forget to ask them for receipts for security deposits. You may not get much from them, but a little bit is better than nothing.

    2Reply
  • George Paiva
    Investor · Milford, CT · Member since 2012 · 592 posts · 285 votes
    13y
    Originally posted by Pat L.:

    I scan all receipts & documents using NEAT as it has great reporting functions that also allow files to be imported into the more common accounting packages. The search filter is great.

    Pat, I am currently researching the NEAT system. Does it allow you to keep the scanned receipts separate per property? Just trying to understand the file structure a bit.

    0Reply
  • George Paiva
    Investor · Milford, CT · Member since 2012 · 592 posts · 285 votes
    13y
    Originally posted by Ann Bellamy:

    I personally use Quickbooks, but used Quicken for a long time.

    Ann, what were the pluses and minuses from Quicken to Quickbooks? I currently use Quicken Rental Property Manager. It seems pretty easy to use but my accountant would rather want Quickbooks.

    0Reply
  • Prashant P.
    Real Estate Investor · Philadelphia, PA · Member since 2010 · 283 posts · 81 votes
    13y

    I use an app called turboscan on my phone. It is not NEAT but is doesnt cost $200 either. You can take a picture of the document up to 8.5" by 11" and save it with a subject. So I save a document as Property1-description, Property2-description. Later on you can sort by name or subject. Works for me.

    0Reply
  • Pat L.
    Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    13y
    Originally posted by George Paiva:
    Originally posted by Pat L.:

    I scan all receipts & documents using NEAT as it has great reporting functions that also allow files to be imported into the more common accounting packages. The search filter is great.

    Pat, I am currently researching the NEAT system. Does it allow you to keep the scanned receipts separate per property? Just trying to understand the file structure a bit.

    Yes I create folders for each property &/or project
    Then generate reports by tax cstegory etc for each, my CPA loves it.

    I bought the small $99 scanner several years ago & scanned in a year of receipts during a ball game.
    I also use my phone to take pics of receipts then import them into Neat

    0Reply
  • Victor Chico
    OP
    Investor · San Juan, PR · Member since 2013 · 71 posts · 50 votes
    13y

    To all who have responded: Thanks for your input! I have a lot of work to do. I'll soon post an update of my plan going forward. I'll definitely have to do the door to door knock that Ann Bellamy mentioned. Luckily, the contracts are with the section 8 office, so I can get it from them - on second thought maybe I may not be so lucky. ;-)

    Let's see where this adventure takes me.

    George Paiva: In my legal office, I use the Fujitsu ScanSnap S1500 for scanning everything. It's about $400, but comes with an Adobe Acrobat X Standard license which costs about $300 if bought separately. I researched the Neat, but read better reviews from the ScanSnap.

    If I'm on the go, I use TurboScan on the iPhone which was mentioned by Prashant P.

    1Reply
  • Ann Bellamy
    Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    13y

    George Paiva, QB is a real double entry accounting system, and Quicken is simply a personal finance manager. As you get into more complex transactions, it becomes harder to record them properly in Quicken using the proper types of accounts because of the limitations of the software. So I bit the bullet. I have never used the Rental Property Manager, so I can't say how accountant-friendly that is.

    For real estate investors, I strongly recommend (even though it's from a guru and you have to pay for it) John Hyre's Keep It Simple System, or whatever he calls it now. It has a QB chart of accounts overlay, and has all the accounts you will ever need for real estate investing. it also has detailed explanations of all the complex transactions and how to record them, such as lease options, refunding a security deposit that includes interest and withholding payment for damages, etc.

    Also, like Victor Chico, I have the Fujitsu ScanSnap S1500, and for the same reasons. I'm very happy with it. The reviews on the Neat system are not as good overall, and my understanding is that it uses a propriety format, so that without the system, you can't access your docs. Not so with ScanSnap.

    1Reply
  • Mark Forest
    Real Estate Investor · Fenton, MI · Member since 2008 · 946 posts · 153 votes
    13y

    This is a good topic and i hope it continues with more ideas. I also have a file drawer with a tab for each property and a file for each tenant, repairs, utilities, any mortgage payments, etc.

    With my current scanner it would take far too long to scan it all in and then save it. I looked up that Fujitsu scanner and it looks a little too expensive for my budget. Does it scan faster than a normal flatbed scanner?

    I use Quickbooks for accounting and TurboTax for taxes.

    0Reply
  • Ann Bellamy
    Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    13y

    Steve Might
    Way way way faster. It does 40 pages per minute duplex. Which is the equivalent of 80 pages per minute. It's scanning both sides of the page at once. Go check it out on Amazon, I bought it on New Egg for 389 on special.

    0Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    13y

    Hi everyone,

    As an accountant, I must say I love Buildium and I love Quickbooks. Quickbooks allows you to attach a copy of each receipt to your transactions. This allows you to simply print a report of each category when needed if you are being audited. It also allows you to run advanced reports.

    -Steven

    [email protected]224-381-2660
    1Reply
  • Brett Shepherd
    Investor · Donnelly, ID · Member since 2013 · 8 posts · 4 votes
    12y

    I havent used any, but I see there are several add on s to Quickbooks specifically for Property Management, if you want to go whole hog.

    http://marketplace.intuit.com/v2/i-property-management/f-property-management/software-solutions.aspx

    0Reply
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