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How to keep track of your property’s operating data (incomes/expenses), simple and free

Today’s post is not providing anything revolutionary, and for some people may be almost unimportant. However in the previous articles here at “buying property in USA” blog, I promised to show you guys how I keep track of my property incomes, and expenses (and any other operation data and information) – in a simple and free way.

I know that there are various software solutions (most of them paid), which can provide you with a similar result, but for my needs (3 properties), it’s more than what I need. What I use is a simple excel spreadsheet, which I have developed over the first months of ownership of the first 2 properties. From both of the property management companies, I get property statements every month in a form of PDF documents, including all the numbers. However it isn’t easy to look for certain information in dozens of these PDF documents I have in my folder, and also I can’t add any notes in it.

Therefore I always rewrite the values from each monthly statement into my own spreadsheet tables. You can see an example of this table below (click to enlarge):

I have similar tables on separate sheets of the spreadsheet file, for each investment property. The columns are following:

• Month
• Rent Income
• Property Management fees
• Repairs
• HOA (Home Owner Association fees)
• Insurance
• Net Operating Income without insurance = reported by property management (NOI definition)
• Balance (staying at the property management account every month)
• Owner draw (check from the property manager)
• Tax (monthly portion only)
• Net Operating Income (including insurance and taxes) (NOI definition)
• Notes (my personal notes, explanation etc.)
• TODO (to do list)

This way, it makes it really easy to look and find out that: the major repairs were done in October, and the tenants haven’t paid full rent in January etc… [continue reading]

Very important are the last two columns – NOTES and TODO. Notes include information about the repairs done in that certain month, my concerns and thoughts, but also my calls or emails to the property manager! It’s very important to keep track of these, because in the future, the property manager might claim that something wasn’t discussed, and you are sure you told him that. Once you have it written here, you have proof.

Also I read an article once, that a property owner was sued by a tenant, because he didn’t take care of some repairs. The tenant was claiming that he called the owner, and that he never came. The owner provided his detailed list of all service calls and communication with the tenant, “proving” that he didn’t talk about it with the tenant. This in the end saved him, because the judge saw how well he kept track of everything.

The last TODO column is simply things which I shouldn’t forget – for example to call the property manager to ask about HOA, or pay the taxes certain months etc. I usually highlight that part as well.

You can download the sample excel file here: Operational Data Sample excel file

So as you can see, it is no science, but it’s more about establishing a good habit of keeping track of things. In the next post, which I already prepared, we will use this information for evaluating the total return of the 2 properties I have owned more than a year, and I will compare that with my initial expectations before actually buying a house in USA. That will be an eye-opener! ;o)

Monday, May 2nd, 2011 at 8:49 am and is filed under General Education. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.