I'm new to house hacking in Charlotte, NC, and could use some guidance. For those seasoned investors out there, what spreadsheets or tools do you recommend for tracking expenses, receipts, and cash flow? I want to stay on top of my finances and make sure I'm managing everything efficiently. Any suggestions or templates you've found particularly useful for a newbie especially when it comes to tracking expenses renting room-by-room basics?
Anything you buy for the rental, the common areas, or yard can be a deduction or an item of depreciation. You should track everything and then touch base with a CPA as to what way it should be characterized.
Typically, things that have a shelf life of over a year are supposed to be depreciated. Depending on what they are, they can either be added to the basis of the property in which case they are depreciated over 27.5 years or they will have their own depreciation schedule. Things that don’t last longer than a year or are not “things” (eg common area electricity cost or a prorated amount of the water bill) can be deducted in the same year.
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
2y
@Harshraj Thakor you are talking about House Hacking, right? So, what program/app are you using now to track your current expenses? What I mean here is that this will be your primary home...so I would recommend keeping it simple. Just use something that is low cost...or free. No need to make it complicated. Websites like mint.com help us track our expenses and that's free. Hope that makes sense.
I agree with @Julien J.. You really don't need anything too complicated at this stage of your investing career. When I started with my first rental property house hack, I used a simple spreadsheet (see Google Drive link to a free template below). It's not perfect and you may want to customize it for your specific property and income/expense structure. But, it'll be a good start.
New to Real Estate · Charlotte, NC · Member since 2022 · 10 posts · 27 votes
2y
Hi @Harshraj Thakor. I'm also going to be starting my first house-hack in Charlotte and I have been wondering the exact same thing so thanks for posting! I'm also planning to track all the items I buy for the common areas (living room, kitchen, backyard). I'm wondering what expenses can be considered for business deductions.
Anything you buy for the rental, the common areas, or yard can be a deduction or an item of depreciation. You should track everything and then touch base with a CPA as to what way it should be characterized.
Typically, things that have a shelf life of over a year are supposed to be depreciated. Depending on what they are, they can either be added to the basis of the property in which case they are depreciated over 27.5 years or they will have their own depreciation schedule. Things that don’t last longer than a year or are not “things” (eg common area electricity cost or a prorated amount of the water bill) can be deducted in the same year.