It can be difficult juggling the daily tasks of running an investing business with everything you already have going on in your personal life. Unless you are ultra-organized, there is an increased likelihood that these two aspects will result in a misshape of some nature. In order to stay organized and protect yourself down the line, you should document everything you do. This may seem to be a little excessive, but how else can you know what you have done if you aren’t organized? More importantly, how can you prove what you have done? By documenting every mailing, phone call and expense, you will have a point of reference to draw from when you require it. Documenting everything will keep you organized and increase efficiency.
Some of the most important tasks are often the simplest. Tasks like tracking a mailing campaign or following up with a seller do not take more than a few minutes. However, their impact is undeniable. If you are trying to get a seller to talk to you or you have already contacted them, it is important to know when you spoke and have their information readily available when you speak again. Investors are advised to keep a notebook handy at all times. The notebook should contain their information, time and date that you spoke. Making note of this will facilitate a smoother follow-up process. Documenting such things will show contacts that you are organized and a potential partner in the future.
If you are doing any work to an existing rental property, rehab or flip, you should document all of your expenses. For one, this will give you a good idea of where your money is going and where you can possibly save in the future. This is also very important around tax time or when you decide to sell the property. If you have ever been audited by the IRS, you know that having documentation is important. If you need to sell and want to use the new appraised value, the lender will most likely need to see before and after photos. Moreover, receipts must compliment the work that was claimed to have been done.
It can be easy to get caught up working out of your truck and just throwing everything in the glove compartment or center council. Even if you are not a technology expert, you should take advantage of the many applications and programs currently available that allow you to organize your efforts. A simple excel spreadsheet can help you document all of your expenses throughout the year. You can place receipts in a dedicated folder for any property you own and have separate files for everything you do. One of the things that make investing great is that two people can be equally successful and go about their business in completely different manners. What accountant and documenting format you use may be different from a fellow investor. Whatever method you use is fine, as long as you get in the habit of documenting everything and staying consistent with it.
If you stay on top of everything you do, you will be much more organized and much more efficient. Instead of spending time retrieving data, you will have it available at your fingertips and can get more work done. Find a simple method to get started and stick with it every day.