How to account for rental income with Property manager expenses?

2 Replies

Book keeping question - how would I record full rental income if I don't actually receive money from the property manager?

For example - For January I receive $1000 of rental income and incur $1100 for misc expenses (due to delinquent tenants, etc.)
I actually did not receive a $1000 check from the property manager, nor did I send out a check for $100. The balance was passed forward to the following month. Even though no real funds changed hands, for recording purposes I need to account for $1000 in income and $1100 in expenses. 

How should I record those? If I enter each within a journal entry, what should the source and target accounts be?


Hello Joe!  be as detailed but the journal might not permit that.  Most of your backed up receipts are either income and expenses. All legitimate expenses are deductible.  Some expenses must be amortized and they are typically longer in life and are usually capital expenses or major expenses.  Good luck to you!

If you are using a property manager, you should set up a trust "bank" account and call it "PM Clearing Account", then treat the PM transactions as if it's a bank account. Once the money is received you will do transfer from the clearing to the checking account. Preferably, you should enter each transaction in the PM Clearing register for more granularity or you can book a single entry to capture the entire transactions for the month. 

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