Brought to you by Team Ringgold | Your Trusted Topeka REALTORS®
Whether you own one rental property or 150, you’re a real estate investor—and that means you own a business. It doesn’t matter if your rentals are under your name or managed through an LLC (though an LLC is highly recommended). Each property is an appreciating asset that creates cash flow through monthly rent payments. By definition, that makes you a business owner in the real estate market.
We believe smart real estate investing starts with smart tracking. To run a successful and profitable real estate business in Topeka or anywhere else, you need to track key financial data. This not only improves your return on investment but also helps you stay ready when tax time comes. Below are the three most important areas every rental property owner should track consistently.
1. Rent and Expenses
Owning rental real estate is more than collecting rent each month. There are ongoing expenses tied to managing and maintaining each property. Tracking your rental income and property expenses every month helps you understand cash flow and identify underperforming properties in your portfolio.
When I first started investing in Topeka rental properties, I used a basic Excel sheet. Now I rely on QuickBooks to track my rent and property expenses. I include:
- Monthly rent collected
- Mortgage payments
- Repairs and maintenance costs
- Capital expenditures (CapEx)
- Vacancy reserves
This gives me a complete picture of how each property is doing. I can see the true cash flow each month and calculate the annual return on investment. It also accounts for rent increases, mortgage changes, and maintenance updates. These reports help me quickly identify which rental properties are profitable and which ones may need improvement.
2. Rehab Costs on New Property Purchases
If you’re buying fixer-uppers in the Topeka area to build equity, tracking your renovation expenses is a must. Every item you buy during a rehab should be recorded. I use a spreadsheet to track:
- Item name and cost
- Quantity purchased
- Item description (brand, size, model)
- Repair category (plumbing, electrical, kitchen, etc.)
This log becomes a valuable reference for future projects. If I renovate a bathroom and need to do something similar in another property later, I already know what it costs. If a faucet breaks, I know the exact part number and where I bought it.
This system keeps you on budget, helps you plan future rehab projects, and simplifies tax reporting by organizing expenses into categories.
3. Equity Holdings
One of the most powerful tools in real estate investing is understanding your equity. Each month, I update my mortgage balance spreadsheet and compare the balance to the current estimated market value of the home. This tells me how much equity I’ve built.
Tracking your equity helps you make smarter financial moves. For example:
- If your loan-to-value ratio falls below 70%, it might be time to refinance or open a HELOC to unlock that equity for your next investment.
- When you track equity across your entire real estate portfolio, you can decide whether it’s time to apply for a commercial loan or pursue a bulk line of credit.
- Your equity contributes to your net worth, giving you a clearer picture of your long-term financial health.
Knowing your equity position puts you in control of your investment decisions.
Final Thoughts from Team Ringgold
If you own rental properties in Topeka or are just getting started with real estate investing, treat it like a true business. Tracking your income, expenses, rehab costs, and equity allows you to manage your investments with confidence.
At Team Ringgold, we work with real estate investors across the Topeka area to help them grow and manage successful property portfolios. Keeping good records isn’t just smart—it’s the foundation of long-term success in real estate.
Whether you’re building your first rental or expanding your real estate business, we’re here to help. Reach out to Team Ringgold for expert guidance on your next move in the Topeka real estate market.
