Recordkeeping Basics for Real Estate Investors

Each property needs its own folder: closing statement (HUD-1 / settlement statement), title work, loan documents, improvement records, depreciation schedule, rental agreements, insurance policies.

Original basis plus capital improvements minus depreciation taken. Update annually. Without it, gain on sale becomes a reconstruction project years later.

Improvements are capitalized and depreciated; repairs are expensed. Document the nature of each significant project — invoices, scope, photos — so the classification holds up.

Property visits, contractor meetings, supply runs — log them contemporaneously. Mileage between properties is deductible if records support it.

Daily log of activities and hours. Calendar evidence. Third-party corroboration (texts with contractors, calendar invites). Reconstructed at year-end doesn't survive audit.

Days the property is used personally (or by family at below-market rent) change tax treatment. A simple calendar log avoids losing deductions later.