Property investing incurs a lot of paperwork and email correspondence. What should you keep, and what is safe to throw out? Keeping organised records is important for the smooth running of your investments and to make sure you are compliant with regulations.
There are software packages available that can help you do this. They range from comprehensive packages for property investors to general accountancy packages which provide some of the record-keeping described here. You can also keep effective records without spending money on these programmes though if you are organised and want to go it solo.
Set up annual files and/or folders – one for each of your properties
This will run for the financial year. These should contain:
- Your receipts and invoices
- Rental statements
- Tenancy agreements
- Property inspection records
- Bank statements
- Cash book (this is a clear record of your income and expenditure using paper, a spreadsheet or accounting software).
Set up permanent files – one for each property
These will run for the life of your investment – from purchase to post-sale. This will include:
- Purchase contract
- Solicitor’s settlement letter on purchase
- Loan agreement, including any refinancing
- Depreciation schedule
- Renovation costs, details and totals
- Any communication between you (or your property manager) and your tenants
- Details of any changes to rent or tenancy conditions
- Tenancy application forms
- Contract of sale
- Selling agent agreement
- Solicitor’s settlement letter on sale
- Loan finalisation documents.
Keeping these records in an organised manner will help you keep track of your cash-flow and will make sure you have everything you need at hand.