@Jules Aton we agree with Account ClosedA reputable PMC should be using Property Management software to properly manage rentals.Every PMC sofware we've looked at has built-in accounting with the ability to generate invoices.

Make sure to consult with your CPA about which hours can be used before starting your hours log.Here are the indicators that put you at risk of an Audit that the IRS looks at with this strategy::(Source)Real Estate ProfessionalIf you don’t have the ability to invest these kinds of hours into a property, you can become a Real Estate Professional under the tax code, or have a wife or husband become a Real Estate Professional, which then will turn your Passive Losses into Active Losses on your real estate.To become a Real Estate Professional, you need to have:(Source)As long as you work 750 hours in real estate (14.42 hours a week excluding vacation), AND half your time is spent on real estate activities (so you could still do other work for 12-13 hours a week), you can qualify as a Real Estate Professional.

The 750 hour requirement is a high bar; it’s essentially a part time job, which can be tough to meet with just two properties (also high audit area and need meticulous records).Also worth highlighting: time spent by others (like property managers) doesn’t count toward your hours unless it’s under your direct supervision and incidental to your own efforts (per IRS regs).

You need to keep a detailed time log as your audit defense since many investors don’t maintain proper records.

Fast Screening and Application ProcessesDelays in responding, showing, and evaluating applications can add weeks of vacancy• Online application software speeds up the review process• Clear screening policies (rental history, income, credit, background)• Quick, professional communication keeps prospects engagedAn approved tenant in days instead of weeks means more consistent cashflow.3.

Quote from @Max Emory: Hey @Joe Steinheiser, once you have more than a few properties, you'll want to consider software.

Use property management software to track maintenance requests, inspections, and communications.

Quote from @Scott Sammons: I would use a PM software that is lower costs than a big one like Yardi.

With REPS audits increasing, the safest route is to work with a CPA.

It’s a strong strategy but also full of pitfalls, so you need your CPA’s guidance on what hours count toward participation and how to stay compliant, especially in case of an audit.