What is Right Way to Record All Income & Expenses

Question

Hello Everyone,

I need advice for how I can Record All Income & Expenses right way,

Here is my story: I just bought a 4-Plex under my personal name & right now tenten paying under my business name.

I want my LLC company will manage and collect all rent and take care of all maintenance and repair instead of my personal name.

So right now,...

My Tenants paying to my LLC &>> I transfer money to my personal account &>> I make mortgage from my personal bank >> and pay repair & maintenance from LLC sometimes personal (because I am confused)

In the last I use Quickbooks

Please advice, Thanks

Basit Siddiqi · Answer

@Raj SinghDid you speak with a professional to suggest why payments are doing into your business entity instead of you directly?Are you getting additional legal protection through this method?Are you getting additional tax breaks by doing this method?

Bill Hampton · Answer

Raj,

check out stessa.com. Its free software for real estate investors to track income and expenses.

Michael Thach · Answer

A property manager is helping you to manage the properties, they do tenant screening, collecting rent, evictions, maintenance and repairs and everything in between. You can deduct the cost of your PM of your total income.

You can do all this is. Is not difficult but you will have to learn to make a proper contract and know what to do when stuff needs repairs. Property managers have contacts to contractors and handyman and usually get a better price than we do.

So it really depends on how comfortable you feel like to manage your own. If you manage your own, you can not deduct it from the earnings. So there is no tax benefit when you manage your own.

Raj Singh · Answer

@Michael Thach Thank you for your great advaice! but as example a lot of people hire a management company to manage and they take care of everything, so can my act same like that management comany?

Michael Thach · Answer

You need an attourney to put your property in the LLC if you want your " Business " legaly under your LLC. I think it call landtrust but when you do be advised that no lender will like it and they have the right to cancel the mortgage. But many won't know and won't care if you still pay the mortgage.

You can pay your mortgage from the LLC business account. I do the same. You can run it as a business and the CPA will use all the money which goes in your business account ( Rent ) and subract all the cost ( mortgage, repairs, maintenance ). To run it as a business this is all you need.

I am not an attourney so you better ask someone who is legaly experienced.

What is Right Way to Record All Income & Expenses

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