By and large, organization isn’t something that Americans are good at. We tend to have too many things, misplace items, and revel in clutter. It’s essentially a national pandemic that’s affecting a large majority of the population. Just consider the following facts as curated by Simply Orderly:
And despite all of these statistics, one in four Americans say they want to be more organized. This makes organization a common, yet elusive goal for the average individual.
As a landlord, you certainly aren’t immune to organization issues. In fact, you have more at stake than most. Between real estate documents, tax records, and other important information, being organized could mean the difference between success and failure.
The average landlords dreams of being organized, but never does anything about it. The challenge can seem so immense and the disorganization so widespread that it’s almost easier to just keep throwing documents into the mess than it is to get a grip on what’s happening.
But you can’t afford to keep doing this. What happens if the IRS comes knocking, or someone claims there’s a lien on one of your properties? Not having the information readily available could lead to a serious legal battle.
The good news is that getting organized isn’t as impossible as it may seem. No matter how severe the situation, there’s a way to a more organized future.
The very first key to staying organized as a landlord is to create a folder for each property you own. If you own one property, there should be one folder. If you own 15 properties, there should be 15 folders. Under no circumstances should one property’s files be mixed with another. This is the quickest way to end up with misinformation (which could unintentionally lead to legal problems in some circumstances).
Within each folder, you should store all documents related to the property. This includes HUD statements, mortgage records, property tax records, insurance documentation, copies of rent payments, expense records, and anything else that pertains to it.
Within each property file, you should have a folder dedicated to tax documents. While the IRS doesn’t stipulate how you organize your documents, you should take extra care to be as meticulous as possible. This means logging every expense receipt, mileage log, cancelled check, and any other instance in which money is involved.
What would you do if your office burned down or the basement where you store documents flooded? It’s always a smart idea to have multiple copies of documents that really matter. This is why many landlords resort to having both print and digital copies on hand.
Spend some money on a fast and efficient scanner and place it on your desk. Sync it up to your computer and create digital folders for each property (just as you have in your filing cabinet). Each time you get ready to file away a new document, scan it and save it in the accompanying digital folder. For added security, store these folders in the cloud so they’re accessible anywhere.
Once you have a folder system setup in your office, it’s pretty easy to stay organized. You just open the folder and drop the document in. The problem is that you aren’t always at your desk. As a landlord, you spend a lot of time in your car driving around from property to property. In the time between getting a document and getting back to the office to file it away, a lot can happen. This is why experienced landlords carry some sort of mobile filing system in their vehicles.
With a mobile filing system, such as the ones found here, you can give any and all documents temporary storage. It also helps if you’re pulling a file from your office filing cabinet and don’t want to lose it.
As a rule of thumb, you should clear your desk at the end of every day. Clutter seems to build on itself and you run the risk of creating piles of documents if you don’t get things filed away each day. If you make it a daily habit, it’ll only take a few minutes. You’ll also feel a lot less stress when returning to work the next morning.
Nothing is worse than going through a folder, knowing that you have the document you’re looking for, but being unable to locate it. Most of the time, this happens when you forget what a document looks like or what specific file the information is in. One way to avoid these issues is to place sticky notes on thick documents to recap what information is contained within.
At Green Residential, we understand the demands of being a landlord. We get that it’s challenging, stressful, and time consuming. And because we have a firm grasp on the issues, we know just how much of a struggle it is to stay organized.
When you work with us, you get 30 years of experience in professional property management. As a result, you can spend less time focusing on time consuming tasks like tenant screening, rent collection, and responding to maintenance issues. We’re prepared to handle it all – including accounting – so that you can prioritize big picture details.
If you’re interested in learning more, please contact us today.
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