To those of you who own RENTAL property.....

[momrek06]

DH & I own a home in MA. We had it on the market for 6 months. Due to this horrific economy we had maybe 5 couples look at the house in those 6 months. With only one very low offer AND winter around the corner, we just decided to take it off the market.

I called a Property Management Firm who had my home rented for exactly what we wanted in 24 hours. The lease starts Sept 1 but we let the couple move in on Thursday.

Today our PM sent us the checks for Security and Last Months rent (PM's fee was the first month's rent).

To those that are landlords and rent property do you have separate bank accounts for your rental income?

Any other tips landlords on the DIS can send my way would be very appreciated.

 

[Cheshire Figment]

It is not necessary to set up a separate bank account. You will have to be prepared to fill in a Schedule E with your Income Tax return. I notice you have two states as your location in your post, you definitely have to report it on your State Income Tax return also.

I would also suggest going to www.irs.gov and order the following publications which will probably help a lot.

334 - Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ)
463 - Travel, Entertainment, Gift, and Car Expenses
535 - Business Expenses
551 - Basis of Assets
552 - Recordkeeping for Individuals
583 - Starting a Business and Keeping Records
946 - How to Depreciate Property

And also, if the time can be spared and at and minimal cost take a first semester Principles of Accounting course at a local Community College. Not necessarily to keep the books, but to get an understanding of what the business is doing.

Note that most small business fail within the first few years not because the owner did not know his subject but because they did not understand the accounting.

Mike (CPA Retired)

 

[momrek06]

It is not necessary to set up a separate bank account. You will have to be prepared to fill in a Schedule E with your Income Tax return. I notice you have two states as your location in your post, you definitely have to report it on your State Income Tax return also.

I would also suggest going to www.irs.gov and order the following publications which will probably help a lot.

334 - Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ)
463 - Travel, Entertainment, Gift, and Car Expenses
535 - Business Expenses
551 - Basis of Assets
552 - Recordkeeping for Individuals
583 - Starting a Business and Keeping Records
946 - How to Depreciate Property

And also, if the time can be spared and at and minimal cost take a first semester Principles of Accounting course at a local Community College. Not necessarily to keep the books, but to get an understanding of what the business is doing.

Note that most small business fail within the first few years not because the owner did not know his subject but because they did not understand the accounting.

Mike (CPA Retired)

Wow, thanks, Mike!!! I really appreciate all your tips.

Yes, the house we are renting out is in MA and we are living in CA. Another great idea; the course at a community college.

I just had my DSon pick up a great book at Borders...."First Time Landlord"!

 

[snykymom]

However, what is necessary in Massachusetts is to put the Security Deposit in a separate, interest-bearing account, and you must send the interest in a check to the renters every year. You must also give the tenant the name of the bank, its address, and the account number. M.G.L. c.186, sec. 15B.

Massachusetts have very complex and complicated real estate laws & requirements. And the various cities and towns add their own requirements.

Start researching here:
http://www.lawlib.state.ma.us/subject/about/landlord.html
and here:
http://www.mass.gov/Cago/docs/Consumer/LandlordTenant073007.pdf

General accounting and tax information is great, but not sufficient.

 

[momrek06]

However, what is necessary in Massachusetts is to put the Security Deposit in a separate, interest-bearing account, and you must send the interest in a check to the renters every year. You must also give the tenant the name of the bank, its address, and the account number. M.G.L. c.186, sec. 15B.

Massachusetts have very complex and complicated real estate laws & requirements. And the various cities and towns add their own requirements.

Start researching here:
http://www.lawlib.state.ma.us/subject/about/landlord.html
and here:
http://www.mass.gov/Cago/docs/Consumer/LandlordTenant073007.pdf

General accounting and tax information is great, but not sufficient.

Thanks for this info, snykymom.
I have been reading in the book I got ("First Time Landlord") and it does say that in "certain" states the Security Deposit must be in a different interest bearing acct BUT this chapter in the book did not say what states that applied to....I better call or email my Property Manager.

Thanks so much for those LINKS. I best get reading. I really appreciate all the info.