Start the Year Right: Smarter Property Expense Management for Investors

As a self-managing property investor, the start of a new year is the perfect time to get your financial house in order. Maintaining clear and accurate records is crucial for long-term success, whether you own a single unit, a fourplex, or several properties. By organizing and tracking expenses from day one, you’ll set the stage for easier tax filings, better cash flow management, and reduced stress.

Start by categorizing your expenses: mortgage payments, repairs, maintenance, property taxes, insurance, and utilities. If this isn’t something you’ve ever done, using a simple spreadsheet is a good first step. If you have several properties or plan to enlist a professional management company, leverage user-friendly tools like property management software. Most software allows you to share records with other users, making it easy for your property manager and accountant to have access. This helps streamline communication and makes your end-of-year filings much easier.

Categorizing expenses can be as simple as dividing monthly expenses from sporadic expenses. Monthly expenses include any utilities you cover for the tenant and pest control. Landscaping and pool maintenance may be a seasonal expense or a monthly expense. In Maryland, it’s typically seasonal. Sporadic expenses consist of HVAC tune-ups, gutter cleanouts, and other expenses that occur seasonally. Don’t ignore annual insurance premiums and property taxes; some investors prefer to record this as a monthly expense to ensure they allow enough margin for these hefty expenses.

Accountants often recommend setting aside 1-2% of the property’s value annually for CapEx expenses. These are large and sometimes untimely expenses that protect your property value. CapEx expenses include roof replacements, water damage, upgrades, or other large maintenance items. Tracking these expenses is especially important to enable you to depreciate these items according to the IRS depreciation schedule, giving you more write-offs to offset any earned income.

Pro tip: Keep digital copies of receipts and invoices to stay audit-ready and ensure nothing slips through the cracks.

For those looking to save time and energy, partnering with a professional property manager can take the burden off your shoulders. At Blue Door, we specialize in helping investors like you streamline operations, improve tenant relations, and maximize property value.

Make this the year you work smarter, not harder. A well-organized approach to property management can free you up to focus on growth—or simply enjoy the rewards of your investment. Contact Blue Door Property Management if you’d like to discuss a more passive investment strategy.

If you have questions or would like to discuss property management services for your investment property, give us a call at 443.252.3385 or email us at info@bluedoor-pm.com today!

Kickstart Your Year with Smarter Property Expense Management