Good books make a rental easier to run, easier to tax-file and easier to grow. This guide covers the accounting basics every owner should have in place, plus how professional management handles the money.
This is general information, not tax advice. Talk to a tax professional about your situation.
Keep rental money separate
Use a separate bank account for each rental, or at least for your rental business. Mixing personal and rental money makes taxes harder and records less reliable. Professional property managers typically hold owner and resident funds in trust accounts, separate from their own operating money.
Handle security deposits by the book
Montana doesn’t cap deposits or require interest, but the return deadlines are strict: 10 days if nothing is owed, or an itemized list with the balance within 30 days if there are deductions (MCA 70-25-202). Missing them can forfeit your right to withhold (MCA 70-25-204). Track every deposit and the move-in condition report that goes with it.
Records to keep
- Leases, renewals and notices
- Rent received, by resident and month
- Every expense, with receipts and invoices
- Security deposits and their final accounting
- Mortgage, insurance, property tax and HOA statements
- Capital improvements, with dates and costs
Common deductions
Rental owners can generally deduct ordinary and necessary expenses, such as mortgage interest, property taxes, insurance, repairs, management fees, utilities you pay, and travel to manage the property. Residential rental buildings are generally depreciated over 27.5 years. Improvements are depreciated, while repairs are usually deducted. Your tax professional can tell you which is which.
Read your numbers every month
Look at rent collected against rent due, operating expenses, reserves for repairs and vacancy, and net cash flow. Each year, compare rent with current comparables, and expenses with last year.
Plan for growth
- Build reserves before you buy the next home.
- Track each home’s net return, not just its rent.
- Review whether the time you spend self-managing is still worth it as you add homes.
How we handle the money
Every plan includes online rent collection, electronic owner disbursements, an owner portal, monthly statements showing income, expenses and maintenance, and a year-end 1099. Fees are deducted as set out in your agreement, and every fee is in writing before you sign.
What our plans cost
Mountain Village Property Management offers three plans. Every fee is in writing in your agreement before you sign.
| Essentials | Signature | Summit | |
|---|---|---|---|
| Monthly management | 4.9% of rent + $69/mo | 6.9% of rent + $69/mo | 8.9% of rent + $69/mo |
| Leasing fee | 50% of one month’s rent | 50% of one month’s rent | 50% of one month’s rent |
| Lease renewal | 25% of one month’s rent | 25% of one month’s rent | 25% of one month’s rent |
| Set-up fee | $299 one-time | None | None |
| Maintenance coordination | $99 per work order | Included | Included |
| 24/7 emergency line for residents | $29/mo add-on | Included | Included |
Our management percentage pauses while a home is vacant; the $69 monthly admin fee continues. Third-party costs may include a coordination markup of up to 7.5% (3% on recurring bills), as set out in the agreement. Compare every plan detail and add-on price.
Frequently asked questions
Do I need an LLC for my rental?
Some owners use one for liability or estate planning. It’s a legal and tax decision, so ask your attorney and accountant.
Are property management fees deductible?
Generally, yes, as a rental expense. Confirm with your tax professional.
What will I get at year end?
A 1099 and your annual statements, which your tax preparer can use for Schedule E.
Talk to a local Bozeman team
We manage long-term rentals in Bozeman, Belgrade, Livingston, Gallatin Gateway, Manhattan and Three Forks from our office on W Babcock St in Bozeman. We’re rated 5.0 on Google (16 reviews). Request a free rental analysis and we’ll walk you through what your home could rent for and which plan fits.