Keeping Books, what do you use?

Question

What program does everyone use to to keep books on your properties?

Carl Fischer · Answer

@Justin Hutchins

You can hire Bookeepers for a few hours a month. Virtual or in person. Very reasonable. Ask your cpa for some leads.

Quickbooks on desktop or online is what you need to decide -the version isn’t that important. Online would make it easier for virtual bookeeper but there are other ways to handle it if you buy the desktop version also which is a little cheaper.

Suggestion—nSpend your time buying properties and analyzing the books not learning the system and doing data entry.

Justin Hutchins · Answer

@Bill Hampton Thanks for the tip, this Stessa program is pretty impressive so far... I'm going to give it a shot, but can't believe it is free. Can I run a PL off of this program at any time?

Carl Fischer · Answer

@Justin Hutchins

A Bookeeper who uses Quickbooks but I am evaluating “ numberz” with a “z” it appears to keep fmv, historical data, original cost, ROI, cash flow, income etc all in one place. Hoping to reduce spreadsheets

Alberto Ramirez · Answer

Depends what the intent of the property is - if you are going to flip it, will go on your balance sheet as inventory and any costs associated with improving or rehabbing the property will be capitalized to the cost basis of the house (roof, walls, bathroom, etc). You could have an account called "House Flip - WIP" and "Rehab costs - WIP". WIP = Work in process a term used in manufacturing. For smaller costs, under a certain threshold provided by your CPA, you are able to deduct those on your P&L right away. Once you sell the property, it will be transfer to your COGS on your P&L.

If you are planning to keep the property as a rental, it will go in your balance sheet as a fixed asset or construction in progress under fixed assets. You will also capitalize all costs that are significant to getting the property ready for its intended use. Once the property is ready to be rented, depreciation can be taken.

Hope this helps.

Alberto Ramirez · Answer

Quickbooks online is the easiest way to keep track of your expenses on quickbooks. In fact, if your bookkeeper is smart they can fit all accounting activity into one QB. They must use the "class" function on quickbooks.

Michael Slockers · Answer

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Yeah it is a challenge. Right now I just show it as capital expenses or repairs and let my paper cash flow take a hit. Adding it to the cost basis is easy at that point because I can add up all the costs including closing costs and acquisition costs, plus capital expenses, when it's tax time.

Another option is to leave the property out of Stessa altogether until it is in-service. That could work except I need some place to track all those costs, it's already linked to the bank account, so Stessa seems to work okay using the method above.

I moved away from Mint for the flipping business and now handle that using Tiller Money Feeds. Not for the faint of heart but it is pretty versatile so I'm sticking with it for now.

Brian G. · Answer

@Michael Slockers how do you handle expenses prior to putting a property in service (ie acquisition, rehab, make ready, etc.)? It would be nice to record that as part of the cost basis. How do you handle that? Thanks!

Sam Wilson · Answer

@Justin Hutchins - we have had good luck with Xero for both of our businesses.

Michael Slockers · Answer

@Justin Hutchins It seems a simple piece of information is missing: What are you trying to keep books for? Your personal description says you are a Realtor. I use Stessa for my rentals, and so far I really love it. I started using it officially January 1. For buy-and-hold it is a great tool and can export financial statements for each property, or for the whole portfolio. I am totally confident it will be making my tax-prep so much easier too. The only struggle I'm having with Stessa is how to handle the rehab before a property is rented. It kind of jacks up the monthly cash flow numbers to show 20k in one month of capital expense. But I guess it's accurate... For our active-income real estate (wholesaling or flipping), I am using <<>> Mint.com. I hate it. But I'm stuck. I find that Quickbooks is more geared towards folks who do a lot of invoicing and collection of payments. I don't do that. I make mint.com work but if there were another free or cheap option for a few flips a year and just normal business expenses, I'd be more than happy to ditch Mint.

Daniel Dietz · Answer

I am wondering if any of you professionals could comment on what you think of Rentec Direct from the accounting side of things if you have used it? We have been using it for the tenant side of things for a while and like it for that. We gave our accountant some sample reports it can produce and he seemed to think it looked fine.

We have been using our old Peachtree Accounting that we use in our 'day job business' for properties too, but are going to be replacing that at work and thought it would be good to take a look at something simpler and more property specific.

Keeping Books, what do you use?

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