STRESS-FREE PROPERTY MANAGEMENT

Back to: Landlord Success: Proven Strategies & Practical Advice for Stress – Free Property Management

PAPERWORK:  They say the job is not complete until the paperwork is done. Managing your rental empire is the same. If you can file as you go through the year makes it way easier when you do your taxes and also when you go to sell the property. 

We create a few different paper folders to keep the different documents separate. We also color code their folders to make it easier to find the correct document.

When you create the folders start with a legal-size folder. Label it accordingly.  The documents should be secured on the right-hand side with a 2-hole punch and prong so you do not loose the documents. Keep the left-hand side for notes that you need to access quickly.

PURCHASE FOLDER (White Standard Color Legal File Folder)

• Label this folder “123 Main Street PURCHASE DOCUMENTS”  
• Store all of your Purchase Contracts, Sale Documents, Real Property Reports (RPR), Titles, Encroachment Agreements, and any other documents from your Lawyer and Realtor in this folder. Make sure you have all the purchase costs recorded in this folder.
• This folder is generally only accessed when you are buying or selling your property or when you need to reference any of these documents like the Real Property Report when you are building a fence, or to check purchase details for tax planning purposes.
• Prior to selling you will have the Real Property Report and all your acquisition costs in one spot for your accountant.

TENANT FOLDER (Green Legal File Folder)

• Label the Property “123 Main Street TENANT INFORMATION”
• In this folder you will keep any written details that apply to the tenant at this property address. Current tenant and most recent documents go on top.
• Tenant Contact Detail Form (completed) gets stapled to the left inside side of the folder. If you need to contact a tenant quickly (or their family member) it is good to have their details handy. (Also add them to your phone and email contacts c/w address so you can search).
• After the tenant moves into the property store the original signed lease and walk-through documentation here.
• Also add their application form, and sometimes I store all applications here temporally in case I ever have a problem with one of the applicants that I did not allow to move into the property. This way you will have their contact details. (Purge this temporary data accordingly).
• All other tenant correspondence goes into this file, rental increase notices, notices to enter the property, eviction notices etc.
• As time goes on and the tenants change continue to use this folder for the new tenants, so you have a record for the property unit.  Keep adding to the top on the right-hand side chronologically.
• If you have any verbal agreements with the tenants have them agree to them in writing and store these in the file also.
• Print any important text or e-mail correspondence and store in the file.
• This folder should not grow that fast and get too big. If it does create another one and archive this one as you would with any important tax documents.

YEARLY EXPENSE FOLDER (Blue Legal Folder)

This Folder will be used to record all your yearly expenses for this property.

• Label this folder “123 Main Street EXPENSES 2024”.
• Any paper and printed expense receipts you acquire for the property should be stored in this folder.
• For example: You go to Home Depot and you purchase paint.  Before you leave the register, borrow the cashier’s pen and write the property address (and description if necessary) on the receipt. Fold it up nicely and store it in your wallet; do not leave it in the bag with the paint. When you get home take it out of your wallet or purse and put it in the correct blue folder. 
• Store any return receipts in the folder also. (If you purchased more locks than you need).
• Store contractor receipts that apply to this property in this folder. 
• Review your local tax laws. In some cases, you may be able to write off tools, etc.
• If you are paying utilities, taxes, and insurance, anything relating to this property goes into this folder, so you have everything available when it comes time to do your taxes.
• If you have an insurance bill or tax bill that is for multiple properties, put a copy into each property blue folder.
• This folder is changed every tax year. Create a new folder (and label) for the upcoming year in December.
• After you have completed your taxes, this folder needs to be archived as you would with any other important tax records. You may also need some of the detail in here if you ever get audited or if you need receipts for returns or warranty issues.
• Put a copy of your yearly bank and credit card statements into the folder for back up.
• Print out any electronic receipts as you get them and put them in the blue folder.
• If you sign up for email receipts still request the paper one. Set up a rule in your email program to put all the email receipts into one specific folder called E-Receipts so you can find them at tax time. 

BANK ACCOUNT FOLDERS X2 (Orange Legal Folder)

These folders will be used to record all your bank account statements for all properties.

• Label one folder “OPERATING BANK ACCOUNT 12345565 XYZ BANK NAME”
• Label the other folder “SECURITY DEPOSIT BANK ACCOUNT 12345565 XYZ BANK NAME”
• Print and store all monthly bank statements in these folders.
• Feel free to write details on any unique transaction for record keeping (e.g., Damage deposit retuned to Tom and Sally 123 Main Street).