…because if you’re not, you could be shooting yourself in the foot!
If you receive any income from a commercial or residential property and are taxed on that income, you could be missing out on rebates in your annual tax returns purely because all your documentation is not in order.
Because renting and maintaining property is such a self-directed undertaking, keeping a record of everything is vitally important both for your own sake and the sake of your returns.
With that in mind, here are a few tips on record-keeping for any reckless renters out there.
When it comes to any receipts, proof of purchase or documentation, turn yourself into a habitual hoarder.
Whenever you invest any money in anything to do with your property, keep the receipt and file it where you're not going to lose it: anything to do with the repair, cleaning or decorating of your property can be claimed back, so keep those IKEA receipts!
No matter how small the expense seems at the time, it all adds up, and it'll make keeping track of how much you're owed on your return that much easier.
...and official documents/contracts...
Obviously this includes any contracts signed by your tenants detailing rent or deposits.
You need to keep these records not just for your own purposes, but as a responsibility to those renting from you. Something else to hang onto is anything you receive from your council, for example any documentation detailing bin or recycling charges; as a landlord, you're eligible to claim back on any rates charged by local authorities.
...keep them organized...
It's all very well holding onto your receipts and documentation, but unless you know what they're for and when they're from, they're useless to you. Invest in a folder and get into the habit of sitting down every month and arranging everything in it.
We have a dedicated tax return service for landlords
...and keep backups of both!
Even if you're the most fastidiously organized person in existence, Murphy's Law dictates that if something can go wrong, it probably will. Make copies of everything.
A smart phone can be an invaluable asset in this respect – whenever you file something away, snap a few pictures of it just in case. Bonus points if you have an iCloud account or something similar to automatically back up your files.
Keeping track of income and expenses on spreadsheets is a great way of having record of them. This way you can see the figures and dates for each.
Make the most of apps
Another reason to invest in a smart phone is that there really is an app for everything – if you're a landlord, there's a plethora of free tools available on both Apple and Android that condense all your payments and paperwork into one place, making your recordkeeping compact, easy and accessible. DIYLandlord is a popular example, but there are other examples out there that don't require any pesky in-app payments.
If you're not that tech-savvy, don't panic! There's a whole host of free resources available to landlords online, from excel documents for record-keeping to pre-drafted contracts and letters for tenants. If you feel like there's something you should be keeping a record of but you're not sure how to go about it, all it takes is a quick google search to find examples or a preformatted model that'll help keep all your affairs organised.
You can find some great material here if you're not sure where to begin.
If you keep hold of all your receipts and keep them organized, filing your tax return can be a total breeze. And if you use them effectively and keep on top of your expenditure, you'll be rewarded by getting the most accurate rebate you're entitled to.