Whether you’re a small-time landlord or a veteran in the property management space, a rent ledger can be one of your best friends when organizing your rental property payment history. It can also be useful for your tenants.
In this article by Baselane, we’ll detail what a rent ledger is, how to use one, and provide you with a complimentary rent ledger template to help you manually track rent payments.
We’ll also offer solutions for automating your rent collection process online using free property management software like Baselane.
1. What is a Rent Ledger?
A rent ledger is a report (typically a document or a spreadsheet) that details rent payments from an individual unit. As a landlord, you need a rent ledger to record and track tenant rent payments while renting out a unit. Ideally, you will have one rent ledger for every unit you own.
A rent ledger includes information about the property owner, the unit’s address, the tenant’s name, the lease terms, the payment history, and other important notes.
2. Why Use a Rent Ledger?
You can become a more advanced property manager by using a rent ledger because it benefits the Landlord and the Tenant.
A rent ledger is a simple way to stay organized and allows you to keep track of the amount of rent your tenant or tenants have paid or still owe.
A rent ledger also creates a paper trail that gives you a point of reference for unpaid rent. Or, should a misunderstanding arise, a rent ledger can act as proof and help you avoid issues with your tenants.
3. Is There a Better Option Than a Manual Rent Ledger?
While a rent ledger on a traditional spreadsheet may be a good way to start tracking payments, online property management and financial platforms offer a more efficient solution. Property management software can provide automated tracking of rent payments and generate rent ledger reports.
Instead of manually updating a spreadsheet, you can keep track of tenant charges, payments, and balances by signing up for a free Baselane account. The tenant ledger tool in Baselane automatically keeps track of outstanding tenant balances, partial months (such as prorated rent), and late charges.
4. How to Fill Out a Rent Ledger?
A rent ledger is simple and efficient to use. We’ll use Baselane’s free rent ledger template to explain how to use a rent ledger.
Typically, a landlord would have one rent ledger per unit. The ledger should contain in following fields:
- The date of the report
- The property owner’s name
- The property address
- The tenant’s name
- The type of property
The rent ledger should feature columns for data input, with categories to classify every rent payment you receive from your tenants.
There should be a dedicated column for the following categories, which can include:
- The date the rent is collected
- A charge or payment description
- Rent amount due
- Rent amount paid
- Balance amount due
- Any necessary notes
Fill out the information monthly or according to the time that rent is collected.
If the tenant makes multiple payments or has outstanding rent payments, you should document them accurately according to the amount and date they’ve sent funds.
You can also include security deposits and utility payments in a rent ledger.
Remember to distinguish them from each other in the notes section.
Our Final Thoughts on Rent Ledgers
Some landlords or property owners may underestimate the importance of using a rent ledger. However, when dealing with multiple tenants, there’s a lot of room for error and confusion, as conversations, legal documents, checks, and other important information can quickly pile up.
If you find using a manual rent ledger tedious, join thousands of landlords automating the process using Baselane’s bookkeeping software.
Yes. Property management software, such as Baselane, can automate the process of tracking rent and eliminate the need for a traditional rent ledger.
Keeping your rent ledgers on file for six to seven years is the best option.
Yes. A rent ledger and any documentation of payments can help you with eviction or other legal disputes.