Second homes and investment properties have always been popular in Malibu and the surrounding area.
However people sometimes take the plunge and purchase investment properties and think that once it starts generating income through rentals etc that they can forget about it.
A lot of landlords do not track their investment homes financial performance or do any type of financial forecasting. In fact, often, the only time they are aware that they have income from their home is at tax time when they declare it!
This is a situation that is far from ideal. Particularly with the number of investors who are snapping up properties in this market.
Here is an idea of what you should be doing!:
1. Keep a balance sheet (a summary of a person’s or organization’s balances. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year).
2. Prepare an income statement (a summary of income and expenses)
3. Keep an income register that includes a rent roll (summary of all collected rents and miscellaneous income).
4. Keep Check register (list of all bills paid by check or via wire or electronic transfer) – Very important!
5. Keep a summary of security deposits.
By keeping these types of documents, either in paper format, or ideally in a computer spreadsheet, you can with a quick glance ensure that all the rents have been paid, bills have been paid on time, whether the bills are higher than usual and that your maintenance costs are what you expect them to be.
By making sure you can see an overall picture of where you are with your investment property you not only can become a better more efficient landlord, you can also ensure that you remain on track financially.
With more and more landlords coming onto the scene across the country the chance of owning investment homes at great prices is slipping away – don’t wait!
If you are interested in purchasing a property or selling a property in Malibu, Pacific Palisades or the surrounding Beverly Hills/southern California area then please contact Judy Kunisaki for professional real estate advice in the Westside Los Angeles area, on 310-317-8396 or via her online contact form on her website.
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Judy Kunisaki – CA DRE license 00963582
