Profit and loss
Money, money, money.
As with any business, you need to keep one eye trained on your profit margins. Just bear in mind that profit and loss relate to all properties within a single property rental business. In this way, a landlord’s properties are interdependent and rely on one another.
The reason it’s so crucial to keep track of your profit and loss is that you need to be aware of how much you’re actually making as a business. This means doing more than just looking at what hits your bank account, which can often be deceiving. One property might be raking in cash, but if the other one needs lots of repairs, you might not actually make much profit.
If you just want to make enough to pay your bills whilst your property increases in value, then you might not be too bothered. But if not, this money can be reinvested in the business (to help it grow), used to pay you a salary, or some combination of the two.
Good accounting software (we won’t be subtle, we mean Pandle) includes profit and loss reports. They summarise the revenues, costs, and expenses incurred over a specific period of time so you can see how things are looking, and compare one time period to the next.