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Rental Income and Expense Worksheet for Vacation Rentals by iGMS
Running a successful rental business may be your dream come true, and there’s nothing more exciting than watching your booking calendar fill up. But without a proper system for tracking income and expenses, that dream can quickly turn into a nightmare.
That’s why we’ve designed a rental income and expense worksheet to help hosts and investors capture every dollar.
The worksheet provides a detailed breakdown of gross income, net income, and monthly stats and expenses. It’s specifically designed for vacation rental managers and property owners and includes categories like Airbnb fees, cleaning expenses, average occupancy rate, etc, so you get a comprehensive view of your rental cash flow in a structured format.
Download the spreadsheet and start using it right away.
Why Tracking Rental Property Income Is Important
Accurate financial records are essential for property management. It’s the only way to assess the profitability of your property and ensure it’s generating positive cash flow.
Rental property earnings are taxable and must be reported to the IRS. The worksheet consolidates all financial data in one place, making it easier to prepare for tax season. Understanding rental property income is crucial for maximizing your rental property tax benefits.
The iGMS free rental income worksheet helps hosts and real estate investors identify booking trends and seasonal highs and lows, allowing you to track rental income on a monthly basis. Analyzing this data will give you a clearer idea to make informed decisions, whether adjusting prices or investing in renovations.
Make Sure Not to Miss Rental Property Expenses
Managing rental expenses can quickly become overwhelming and easy to lose track of. Besides operating expenses like utilities, you should track mortgage interest, taxes, insurance, maintenance, etc.
Short-term rentals also involve Airbnb fees, cleaning fees, and sometimes property management fees and advertising costs.
This is where iGMS’s comprehensive worksheet is useful because nothing will slip through the cracks.
Be sure you’re claiming all eligible deductions and tax benefits accurately thanks to the organized data.
Tips on Using iGMS Downloadable Vacation Rental Income and Expense Worksheet Template
After you download the worksheet, you’ll be able to input data for each of your properties. This allows you to track how each property performs and make comparative analyses.
Here are some details and instructions on how to use it:
Customize Your Worksheet
This monthly rental income and expense worksheet track all your rental properties. The worksheet is customizable to fit the individual characteristics of the rental property. It’s completely free and you can download it in one click as a Google Dic or Excel file.
You can always add additional expenses to calculate like HOA fees, WiFi, pest control, or any amounts you had to spend on repairs and maintenance.
Conversely, you can remove categories that don’t represent the financial picture of your property.
Comprehensive Itemized Categories
You’ll have a separate spreadsheet for each of your properties, divided into income and expenses sections. Each section is an itemized category highly specific to vacation rentals. It includes parameters like the number of booked nights, available nights, average occupancy rate, gross income, vacancy rate, and average daily rate.
The expense section covers everything from bills to Airbnb commission and cleaning services. Input data month by month for a detailed overview of your rental finances – monthly and yearly financial performance.
Organize and Store Records in Case of an Audit
Rental property owners should keep accurate and detailed financial records. Use a file folder or digital storage system to store records, including receipts, invoices, and any relevant financial documents.
This approach ensures you’re well-prepared for tax season, making things much easier for both you and your accountant.
Records should be kept for at least three years in case of an audit, though it’s recommended to keep them even longer.
In the event of an audit, the IRS will closely examine your financial records. Having organized, thorough documentation can significantly reduce stress, as it allows you to quickly and easily provide proof of income and deductions.
How Rental Income and Expenses Are Treated by the IRS
Rental income is generally considered passive income. More precisely, it’s what you get by buying and holding rental property, owning shares of a real estate investment trust (REIT), or participating as a silent partner in a real estate syndication or limited liability company (LLC).
Owners of rental properties need to include their rental income and expenses when filing their tax returns. In the U.S., Schedule E (Form 1040) is specifically used to report income and expenses related to rental properties. It allows you to detail all rental income received and itemize deductible expenses like repairs, maintenance, and property taxes. The form also includes property depreciation calculations as compensation for wear and tear. You attach this schedule to Form 1040.
Difference Between Gross and Net Income
In our downloadable rental income and expenses spreadsheet, you’ll find the terms gross income and net income. Let’s clarify them:
Gross income is the total amount of money earned before any deductions or expenses are subtracted.
Net income is the amount of money remaining after all expenses, deductions, and taxes have been subtracted from the gross income.
It’s best to look at these figures in relation to each other. Gross income shows your earning potential, while net income reveals the actual profit after covering all costs. Understanding the relationship between these figures helps you optimize the profitability of your rental property.
How Much of Rental Income Goes to Expenses?
Like so many things in life, the answer is: it depends. The amount largely depends on the property, amenities, location, and property management. Zillow reports that operating expenses can range from 35% to 80% of gross operating income.
To put expenses in perspective, you can calculate the expense ratio. It’s calculated in this way:
Expense Ratio = (Total Expenses / Gross Rental Income) x 100
A well-managed rental property should have an expense ratio between 30% and 50% of rental income, assuming you don’t hire a management company.
There’s also the “50% rule” to help with estimations. This rule states that normal operating expenses (excluding mortgage payments) should be about half of the gross rental revenue. In other words, if your gross figure is $2,000, expenses should be around $1,000.
Keep Track of Tax-deductible Expenses
Keeping a detailed record is an essential part of bookkeeping and will serve you for tax deductions. The IRS requires detailed records, bank statements and receipts to approve deductions. Here’s a list of commonly deductible expenses:
- Mortgage Interest
- Property Taxes
- Insurance
- Utilities
- Repairs and Maintenance
- Property Management Fees
- Cleaning Fees and Supplies
- Advertising and Marketing
- Travel Costs
- Depreciation
- Supplies and Equipment
As a rental business owner or host, you can download a rental income and expenses worksheet provided by iGMS. And choosing iGMS as your rental property management software can simplify this process for you.
We provide financial reports on bookings on platforms like Airbnb, Bookin.com, Vrbo, and direct reservations. iGMS automatically generates monthly reports, giving you an overview of total revenue, cleaning fees, management fees, taxes, service fees, and payouts. This will streamline your tax time preparation, rental property finances, and accounting.
Save time on manual work and gain a better overview of your rental profitability while effectively managing your property. Schedule a free demo on our platform.
