Quickbooks set-up
Hello. I'm new to the forum, although I've been reading it for a long time. My wife and I have two residential rental properties that are not held in an LLC (one is our former house and the other is one we bought for my parents to live in that we now rent to a tenant). My question is not related to those, but to a new venture.
Four of us have started an LLC and intend to purchase, rehab, and rent residential real estate. We are closing on our first property on Friday. It is a VA foreclosure. The tax assessment is $181k ($74k for the land, and $107k for the improvements). Our purchase price is $69k. (In a funny store, we had offered $72k to the VA for it when it was listed at $85k a month earlier, but they rejected the offer without a counter and then took it off the market.) We anticipate spending about $55k to rehab the property, with an anticipated AVR of $190k.
We are going to use a property manager to rent and manage the tenants, so the LLC that is buying the home will receive rent from the property manager and the property manager will withhold his fee from the rent before paying it over to us. I'm trying to figure out how to set up Quickbooks to keep track of these transactions. Basically, we'll be buying an asset, spending to improve the asset, receiving rent (but not directly from the tenant), and paying management fees. I want to try to make sure we set it up properly so that QB handles the depreciation and everything else. Does anyone have any suggestions on how to go about it? I'm not sure what the depreciable basis is in the property, as the property tax assessment would assign zero (or even a negative) value to the home.