As real estate investors you may at some point be overwhelmed with paperwork. Mortgage documents, leases, inspections, plenty of receipts for expenses, etc. can be a growing pile on your desk if not dealt with properly.
We often get asked how to stay organized and efficient, allowing you to stay organized and reduce your stress levels when it comes to paper work. I’ll share a method that has kept my paperwork organized and I hope it helps you as well and here it is.
You’ll need four file folders in different colors – I like blue, red, green and white/plain and you can use any colors you choose. You’ll need one set of the four colors per property.
Blue folder: purchase and mortgage documents.
Red folder: tenant info, copy of lease, rental application, background checks, etc. and copy of lease option agreement (if rent to own).
White folder: Property management agreement (pma), insurance policy, copy of home inspection and warranty info.
Green folder: receipts for accounting, as you have expenses drop them into the green folder to accumulate. At year end remove and replace the green folder for your accountant. Start a new green folder each year.
The other folders do not change, just update tenant info as needed. You can naturally adapt the contents of folders for your properties to help you stay organized.
Good luck, now go out and start filling those multi-colored folders!