The Bookkeeping Best Practices That Will Keep Your Short-Term Rentals Running Smoothly

Separate Your Business and Personal Accounts

One of the biggest mistakes new hosts make? Mixing their STR finances with personal accounts. Imagine determining which Amazon order was for guest bedding and which was for your cat’s new bed. Spoiler alert: It’s not fun.

Opening a dedicated bank account for your STR is a game changer. Everything—income, expenses, and profit—flows through this account, so you don’t end up with a confusing mess at the end of the year. This is where Baselane comes in.

With Baselane landlord banking, you can set up individual accounts for each property, allowing you to track all expenses and income separately. It’s a dream come true for STR hosts who want to keep everything organized without manually sorting through transactions. Plus, Baselane makes it easy to categorize expenses.

Categorize, Categorize, Categorize

This brings us to the next point. The beauty of bookkeeping lies in categorization. Separating expenses by type—maintenance, utilities, supplies, marketing—gives you a clear picture of each property’s costs. Not only does this make taxes more straightforward, but it also helps you understand your operating costs to identify where to cut back if needed.

With Baselane, categorizing expenses is easy. Baselane’s one-click categorization makes it easy to auto-tag each expense, so you’re not left scratching your head about that $72 charge in June. Was it for repairs? Cleaning supplies? Knowing where each dollar goes helps keep you on top of things.

Automate Income Tracking and Expense Tracking

STR income can come from multiple sources—Airbnb, Vrbo, direct bookings, you name it. Tracking it all manually isn’t just time consuming; it’s a recipe for error. Automating income tracking simplifies the process, ensuring each booking is logged without the risk of manual entry mistakes.

And let’s not forget expenses. While keeping all those receipts in a folder might sound satisfying, there’s a better way. Baselane syncs directly with your bank, automatically logging every expense. Can you imagine having integrated bookkeeping that automatically categorizes transactions by property and Schedule E? No more manual entries, paper clutter, or late-night receipt hunts.

This automation also makes it easier to spot trends. Is your cleaning bill getting higher each month? Are utilities going up in winter? When you track everything automatically, you have real-time data on where your money goes.

Track Revenue Per Unit

When you have multiple STRs, tracking revenue per unit is essential. Each property will have unique expenses and income streams, so it’s important to see how each performs independently. Tracking revenue per unit helps you understand which properties are absolute stars and which might need extra attention (or a price adjustment).

Thanks to Baselane’s detailed reporting, you can easily see revenue by property. Baselane’s reports allow you to break down each property’s profitability and compare income and costs across your portfolio. If one property consistently outperforms another, you might invest more in its marketing or add extra amenities.

Schedule Regular Check-Ins

Even with automation, you should check in on your finances regularly. A quick weekly review can help you spot irregularities or unexpected expenses before they become big problems. Set aside time each week to:

• Review income and expenses: Ensure each transaction is correctly categorized.
• Adjust pricing: Compare your pricing with competitors to see if you can increase your nightly rates.
• Plan for the future: If you notice rising costs, brainstorm ways to cut back. Likewise, if revenue is substantial, you might have the flexibility to invest in upgrades.

Keep Taxes in Mind All Year 

If you only think about taxes in April, you’re in for a tough time. STR hosts have access to many deductions, but tracking everything is vital. If you manage your property from afar, every expense counts toward lowering your tax bill, from repairs and supplies to travel costs.

Baselane’s reporting tools make it easy to prep for tax time. By organizing all your financial data, being able to download a tax package, and allowing you to export it for your accountant, Baselane ensures you’re never caught scrambling. It’s like having a personal assistant for tax season; it makes a difference.

Embrace the Power of Reports

Reports may sound dry, but they’re the secret sauce for understanding your business. Regularly reviewing reports helps you make data-driven decisions, like investing in another unit or adjusting pricing to maximize bookings. 

And here’s the kicker: Baselane’s reporting isn’t just helpful; it’s enjoyable. Instead of feeling like a chore, reviewing reports becomes a chance to celebrate your wins and learn from your data. You’ll be surprised at how satisfying it is to see your hard work quantified in black and white.

A New Bookkeeping Age

Bookkeeping for STRs doesn’t have to be a dreaded task. With the right system—like Baselane—you can turn bookkeeping from a necessary evil into a core part of your strategy. You’ll have a clear picture of your business’s health by keeping accounts separate, categorizing expenses, automating processes, and scheduling regular check-ins. I’m very excited to see what types of automation tools are coming and how I can continue to save more time than I ever imagined.

So, the next time you feel overwhelmed by numbers, remember that a little organization goes a long way. And with Baselane in your corner, you’ll have the tools to take your STR business to the next level—minus the headaches. Who knew bookkeeping could feel…good?

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.