Keeping track of expenses

27 Replies

How do you keep track of your expenses? I got an email from Cozy saying they offer a tracking service.... anyone familiar with it?
@John Thedford ... do you keep your receipts desperate according to property, or just all together?

I started using the Cozy expense tracker this evening. The report, or lack thereof, leaves a lot to be desired. It's really just a simple form to enter data in, that gets converted to an Excel file.

Just know, that this data is going to be used to compile a larger databank of information they can sell in the future, whether it's stated or not.

@Carrie A.

I file  everything alphabetically. I use an accordion file. That way everything is in one place. 

I have everything set up in Quickbooks for records. As an example:
Under fixed assets I have an account for properties. Under properties, I have a sub acct for each one. Under each property, I have sub accounts for various depreciation purchases such as roof, refrigerator, etc. When I make a major purchase for any one property, I simply add a sub account under that property.

For expenses, I have an account called rentals. Under that, I have a sub acct for each one. When I write a check for expenses for a certain property, I attach it to that property. I can print a report that shows all expenses for that year for each property. 

I like QB. It is inexpensive and easy to use. There is more to it than just tracking expenses. Got a mortgage on your rental?  QB makes it easy. I have accounts set up for mortgage loans as liabilities...all set up under one master mortgage account, and on the expenses I have a master account called mortgage interest, and under that each payee. When I write checks, I credit the liability account so I know EXACTLY how much I owe any month, and debit the interest account when I write a check to each lender. This makes it super easy to 1099 them at the end of the year. I also have a manilla folder for each mortgage with an amortization schedule so I can easily look up how much of the payment goes to principal each month.  This is how I know the breakdown on P&I to put into QB. 

This may not be the best system...I am no bookkeeper...just what I started with and have used for years. 

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600
Originally posted by @Jeremy Hua :

Just know, that this data is going to be used to compile a larger databank of information they can sell in the future, whether it's stated or not.

 Hey Jeremy! Katie from Cozy here.

I wanted to let you know that we absolutely are not compiling people's expenses to sell later. Any information you put into Cozy is your information and we don't sell your information. 

And just FYI, a PDF export is coming very soon!

@Katie Harlow - I'm excited that Cozy got into tracking the expense, but as you know, it has a long way to go. Are you in charge of developing that portion of the software? I would love to give you some feedback. 

For those of you who use quickbooks, like @John Thedford , do you use the online version or the software? I was looking at the software, but at $200 it seems like a big commitment...

I'm not trying to be pointed, but if we are going to invest thousands, or even hundreds of thousands of dollars into a property and we won't spend $200 on software which will make expense tracking and tax time much easier- then I think we have priorities in the wrong order.
That being said, many people are efficient with excel to the point they don't need quickbooks.
Alternatively, you could use google docs(also free).
OR you could even use Libre Office. It's a completely free home office suite that has excel and word.
One though one receipts, as of writing this I'm going to start scanning my receipts so I don't have the bad luck of needing one and it has been bleached over time.

@Nate Kaminski, I have no problem paying for the software if it works well for me, there are just so many options out there that people recommend, I'd prefer to try before buying.

I have been using Quickbooks desktop for a while now in a small business I own. There is a lot to learn and not  as easy as the commercials imply unless you have an accounting background. I have one person on the payroll and it is an annual subscription. Quickbook desktop is supported for 3 years and then  you have to buy the latest version to be current but you can continue using the old version if you like. Since I have an employee I have to buy the annual payroll subscription. I have found it is cheaper to buy Quickbooks Pro with enhanced payroll on Amazon than it is to buy the payroll subscription at Quickbooks. It also keeps my software current.

As John Thedford says, once QB is set up properly, it is fairly easy to use. I have a couple of rentals and my next project is to set them up. I would also like to include an online payment like Cozy.

QuickBooks Online is not for Landlords...not really.

We have a lot to report to the IRS. Our houses are worth hundreds of thousands of dollars as the above poster posted. We need to keep detailed records on our properties. We have tenants that we need to report income and repairs from. We have laws we need to adhere to. Our industry is like no other. We are responsible for other people's lives. Therefore, we better develop good bookkeeping habits in order to protect our rumps in a court of law.

Quickbooks Pro desktop version allows us to customize QuickBooks to show everything we need to know about our properties, our tenants, our income, our expenses, our worth in a nutshell. Online only gives you a smidgen of what the desktop can do.

Plus Online is expensive. You have to pay a monthly fee. QuickBooks Pro Desktop: You pay a one-time price and it's yours forever.

Nancy Neville 

My wife uses Excel. She plugs everything into a massive spreadsheet. We use three credit cards to help break down our business expenses at the point of sale and two more for our personal expenses. These are all paid off in full at the end of each month -- we have not paid anything in credit card interest fees in five years of operating like this thanks to her financial discipline. The separate bills from the cards are to help us immediately target what we're spending too much money on. We have almost daily discussions on how well we're meeting our weekly and monthly expense goals and targets.

It is much easier to make money and spend what you make than it is to steadily accumulate wealth and not let it slip through your fingers. There seems to be an awful lot of people who get into real estate with the belief that they'll be happier if they make more money because it will allow them to become more extravagant spenders. This is the core of what these people call "financial freedom." In other words, there's no real "why" to amassing wealth other than to spend it in greater amounts with less discretion and care.

In our experience, that puts the cart before the horse.

Hi @Soh Tanaka ! Jordann from Cozy here -- please feel free to email us to send any feedback you have our way. Much appreciated!

I have used spreadsheets in the past and they work fine on a small scale but as you get bigger they become very labor intensive and cumbersome. I am also totally self employed and putting together a financial statement at any point during the year is easy in Quickbooks. I have done one flip and immediately realized that if I tried to do multiple flips at the same time, manually tracking all the expenses for all the different flips with spreadsheets could be very inefficient.  Quickbooks also allows you to do budgeting within a project although I have not used that yet.  Cash flow management is very important, ask anyone who ran out of money.

I have been using QuickBooks 99 since 1999. I like it, it does what I need it to do, and I don't like change,  so I haven't upgraded.

I use classes to keep the income & expenses separate for each house (I have 12) for tax purposes, and to make it easy to see how each property is performing. I have no mortgages,  but if I did, QB would track those for me.

I use LandlordMax and its great. Very user friendly and configurable to your individual situation. Can print up just about any report you would ever need. Costs 200 bucks, (no yearly or monthly cost) but you can use it 30 days free.

@Matt Naclerio @Nancy Neville

et al...

Thanks to all who recommended Quickbooks. I just ordered the desktop edition for Mac, which I had to get on eBay because Intuit discontinued the Mac desktop version in 2016. It won't be supported after 2019, but whatever... after being part of the erentpayment debacle, I don't want cloud-based property management software at the moment. 

Self created spreadsheet with presets for the IRS expense categories. Should make it easy to run a pivot table at year end and complete Schedule E. Only got 1 property (3 units), so not very difficult to manage at this point.

We scan in all receipts and started backing up files to cloud service to avoid loss risk. Less paper the better to me.

I'm just starting out with two rentals, so a Google docs spreadsheet works for now. The bonus is I use a similar speeadsheet to estimate cash flow, ROI, etc., then copy that into a workbook I use to track expenses and review how accurate my projection was.

Scaling up, it sounds like QuickBooks is the way to go. Are there some articles, books, or online courses someone could recommend about basic real estate accounting? Or is that best left to a CPA?

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