Do you own a second home that you rent out? Are you a property manager for a rental complex? Maybe you manage a storage facility.
Regardless of the particulars of your rental company, navigating the legalities of the lessor/lessee relationship can be difficult. However, with this rental invoice template, you’ll know exactly what should be on your rent receipts and invoices.
There is an important distinction to make between whether your rental income is coming from a property or a business. In order to distinguish between the two, consider the types of services you are providing your tenants.
If the services are basic, such as heat, electricity, parking, and laundry, this means you are receiving your rental income from a property. If there are any additional services such as cleaning, security, and meals, this may mean you are considered a business. Typically the more services you offer, the greater the chance that your rental operation is a business.
Business rental properties will generally be a corporate entity rather than a person or family. However, both residential properties and business rentals need a receipt.
The different types of rentals that require a receipt include:
Once your rental invoice templates have been obtained, its now time to consider what items should be listed. As the owner or manager of a piece of rental property, it’s important that you understand the responsibilities of your role, and those of the tenant, or leasee. There are critical aspects of the landlord/tenant or lessor/leasee relationship.
On your rental invoice or rent receipt, be sure to include:
– Your name and contact information (for landlords of small property)
– Your company name and contact information (for property managers)
– Your mailing address
– Rental dates
– Rental type
– Unit rate
– Quantity
– Total cost
Additional items, such as the date of invoice and invoice number, are helpful for internal record keeping. Also useful is a portion at the bottom of the rental invoice receipt marked for Internal Use Only. In this section, you can keep track of items such as when the leasee paid and what form of payment they used. This information is especially helpful during tax season.
If your rental is only for a few days (car, boat, or cabin), put the date rented in the Rental Date. Under Rental Type, specify what’s being rented, and for how long. In the Unit Rate cell, note how much the rental costs per day, week, or other period of time for which the specific rental is eligible. In Quantity, how many rental periods are being charged. Under Cost, detail the total cost for that specific rental. Finally, note the subtotal, total due less any deposits, and the invoice balance.
According to Rentals.ca the average price of rent payment for all Canadian properties in December 2023 was $2,178 per month, which is up from 8.6% annually. This includes rental properties such as single family housing, townhouses, apartments, condos, and basement apartments.
The average boat rental in Canada is around $300 per day, although there are several price points and hourly options. Storage rentals in Toronto average about $183.50 per month, with factors such as the number of weeks needed and the amount paid in advance altering the rate. Take into account the type of your rental, location, rental term, and more to determine your rate.
If you are looking for a more specific answer to this question, use Zillow’s free estimate tool to give you a better idea of how much you should charge for your rental.
In short: yes. A rental receipt invoice is proof for both parties that a transaction has taken place, the amount of the transaction, and if and when the amount has been paid.
Sending out a rent receipt to tenants will help you keep track of your revenue, accounts and expenses, which then can be used for tax deductions. You are allowed to deduct any reasonable expenses you encounter when you earn your income via rental means. There are two basic types of expenses you may deduct from your taxes: current expenses and capital expenses.
Current expenses are repeated expenses that support a short-term benefit. For example, the cost of repairs you make to keep an asset in the same condition as it was when you acquired it. You can deduct current expenses from your gross income in the year you incur them.
Capital expenses are incurred to provide a long term benefit. For example, buying the rental property, legal fees connected with buying the property, or the cost of furniture or equipment you are renting with the property.
Here is a list of deductible expenses you can make on your rental income, as outlined by the Government of Canada.
The invoice for a transaction in which monies are paid upfront should be issued at the time of payment. If payment is expected at a later date, send the invoice on the date the leasing party has been told to expect to receive it. To keep track of these future invoice dates, cloud-based accounting tools such as QuickBooks invoicing software can help you ensure everything runs smoothly.
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