I'm starting out, and have 1 property, and I am trying to figure out how to do the books. I have decided that I want to use Excel for the first year, to get comfortable with bookkeeping.
I currently have one rental property, with a tenant moving in at the end of December. I just opened a Business checking and Business Savings account (I formed a DBA), with my personal funds. I plan on growing in 2018 (I'm hoping to acquire 10 next year), and have decided that I do not want to open a bank account for each property, I'd rather run them all out of one account. Here are my questions:
- Do I need to create a separate spreadsheet for each property? (I can't figure out how to add more than one property to excel, while still being able to separate the expenses to the corresponding property)
- Should my spreadsheet/spreadsheets match my bank account balance exactly?
- How do I track expenses that are not tied to a particular property? (Direct mail marketing expenses, printers, lawyer fees ect.)
- Should I have two business accounts? One for rental properties, and one for the business expenses (direct mail costs, acquisition costs, gas, paying private lenders)? My idea is that money will come into the rental property account, and all of the rental property expenses will be payed out of that account (including what I will be saving for reserves); Then the cash flow (profit), will be payed to the business account, and then the business account will "pay" me my personal income from everything.
If someone could help explain this to me, I would really appreciate it!
I like Quicken.
Congratulations on your first property! Excel is a great program to use. A simple solution would be to use separate columns for the separate properties and another column for the totals. It would be something like this:
Column A: labels for your rows (income, advertising, repairs, landscaping, etc.)
Column B: Property 1
Column C: Property 2
Column D: Property 3
Column E: Totals. You can use a formula to add across like: =sum(B2:D2)
You can then create formulas to sum your expenses, calculate net income, and calculate any other metrics that are meaningful to you. YouTube is filled with useful tutorials.
A google search might turn up an Excel template that you could use.
Hope this helps!
@Kole Kingslien Hey Kole, I am in the same position you were two years ago and I now have the same questions!? Would you be able to share any solutions you came up with!?