How do you track expenses and returns?

Question

Hello, I'm about to close on my first 3 properties and want to set up all the necessary ways to track my income, expenses, and overall returns. I'm using a property management company so they'll provide monthly reports, but I'm looking to be able to track trends, etc... Question is, with only 3 properties for now and looking to get a few more, would you do this in a spreadsheet? I don't want to purchase any expensive software just for these basics. Any recommendations? If someone has a nice spreadsheet set up, will you delete your data and willing to share? Thanks for your help!

Brandon Baker · Answer

Thanks @Connie Chan, I'll check it out!

Connie Chan · Answer

@Brandon Baker spreadsheets can definitely be helpful. My issue with them though is you also need to keep a photo of the receipt. Some people scan them separately or just keep them in a bag in case they need them in the future. The other issue I had was I really dislike google spreadsheets on the phone. And excel for me is best used on my laptop, which means I have to wait and gather all the receipts to do it at the end of the day versus just logging things right there and then as they come in.

I now use an app called Tellus. It’s fast to log expenses and I can snap a photo and also classify it into a tax deductible category. It also generates p&l reports whenever I want. There are other products out there that also help with expense tracking. Also I add my mom and husband as co-managers so they can log things in too which they have when they handle things when I’m out of town. The app is free so worth checking out!

Brandon Baker · Answer

Thanks everyone! I really appreciate your responses...

@Daniel Hyman, yea, I thought about that and may be a good choice.

@Nick Peters, thanks for the suggestion, those spreadsheets offer an enormous amount of info. The only thing they lack is the ability to track overall profit/expense across multiple properties.

Daniel Hyman · Answer

You can keep a listing of income and expenses on spreadsheets. However, if you are planning to scale up, it probably pays to learn Quickbooks sooner rather than later.

Either way, make sure to consolidate all of the activity (PM statements, bank statements, cc statements, mortgage statements, etc) on one set of "books." Each property should have its own P & L so you can manage individual performance. It also makes year end tax works much cleaner.

Nick Peters · Answer

Same as others. I keep track of everything with spreadsheets. One tab by property that includes everything related to that particular property, which then feed a consolidated tab that calculates different indicators and also feed different reports and summary pages to have a quick overview of the portfolio.

Spreadsheets are still my go to because it remains both the cheapest solution and the most flexible (and secured, no third-party reliance)

David M. · Answer

@Brandon Baker

I just keep mine on spreadsheets. For a rental there aren’t many entries.  Each entry has a categorization which I use with the sumif equation to give me yearly sums of the various expense categories on SchE. Come tax time it’s just “plug and chug.”  I prepare my own taxes.

A separate summary spreadsheet brings the sims together for easy viewing, passive activity loss calculations, and my overall return calcs.

Brandon Baker · Answer

@Alex Olson yea, it’s the same PM for now. I started downloading templates and will see what the PM provides, then create something as needed.

Alex Olson · Answer

Is it the same PM? If so they should be able to track them all for you. Then use simple excel or Google docs to keep more detailed track to the level you want. Hope that helps!