You won’t need to find specific software for landlords. If you’re processing multiple invoices each month, you probably need to buy accounting software. If you only have a few transactions per year, you can probably stick to a spreadsheet. There’s no rule for when you should graduate from back-of-the-envelope bookkeeping to a full system with double-entry accounting. Keeping a balance sheet updated would be more work than it’s worth for these little units.įor rental property accounting in my professional capacity, I use our accounting software to do monthly bank reconciliations and keep the rent roll up to date (we’ll get to these terms in a minute). Every month, I check to make sure the rent payment went through, and I keep receipts for the year in a physical folder. In my day job, I manage 20-30 units owned by the owners of my company.įor the two condos, I keep a financial statement spreadsheet updated annually for when I’m doing my taxes. I personally own two condos that are rented to tenants I find on a local classifieds website. I do property management bookkeeping in two different ways. Here are the steps I’ve personally used for a few different situations I’ve been involved in. How to set up a property management accounting system
You recognize revenue for all rents received and expenses for maintenance, landscaping, and other cash outflows. Property management accounting is landlord accounting. Overview: What is property management accounting? Read on to learn how to set up a system for your property management accounting. But was that cigarette smoke I smelled in the living room?Īccounting for your rental properties doesn’t have to be this stressful. I was reasonably sure the condo would not explode anytime soon. Several hundred dollars, an irritated tenant who came home early to a 50-degree apartment, and a few days of high blood pressure later, the furnace was fixed.
I quickly turned off the gas and called the gas company. When I got there, I discovered the furnace had come completely off the wall. The other tenant said he was out of town and couldn’t check, so I left work to run to the condo and make sure it wasn’t about to explode. One tenant texted right away and said that he had checked everything and it was all good. Next I had to make sure our rental properties were OK. I quickly checked my water heater and furnace to make sure we didn’t have any gas leaking. Earlier this year, we had an earthquake here in Utah.
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