Helpful Bookkeeping Tips for Real Estate Investors

[Max Emory]

CRAFT YOUR INCOME STATEMENT (P&L) TO APPEAR MORE "BANKABLE" WHILE STILL LOWERING YOUR TAX BURDEN

How your categories/accounts are structured on the income statement (profit and loss) matters and this may help you "sell" that you have a higher net income from your business for "banking purposes" than you pay taxes on.

Now, this won't work with all lenders and it helps a lot if you have/form a relationship with the bank/lender/investor/etc.

I usually code all of my expenses that I would pay for anyways (if I didn't have a business) into "other expense" categories to separate them from the COGS and expense accounts that are necessary for me to run my business.

This allows me to structure my income statement to show me what my actual income is on the "net operating income" line and what I will pay taxes for on the "net income" line.

Who else has tricks like this to better see what you need to see from your financial statements and to stay "bankable" as an entrepreneur?