Some properties are self-managed, so we create an invoice for each tenant, and mark them as paid as rents are collected.
When collecting rents that go through property managers, I am not sure what the best practice is in QBO.
Should I be invoicing the tenants (and then sending these invoices to the property manager), or invoice the property managers?
We are not sure what the best way to go forward with this.
You do have to manage your property managers, but let them keep up with the book-keeping and provide you with a report. That's what you are paying them for. When you use a property manager, your job is to review the report each month (and year end), and make sure that you are getting paid the correct amount, make sure that there are no excessive maintenance/repair charges, and to make sure that the PM is being strict, firm, and fast on collecting from late and non-paying tenants. I see no need to enter anything into quick-books, etc if you have a good PM that is providing you with good reports. You just need a system to keep up with which tenants are behind (you can easily do this in Excel). At the end of the year, the PM should provide you with a year-end report that you can give to your tax guy/gal.
That is a fine point, I don't want to be managing myself. But I do want to keep better tabs on what is going on, and reduce the lag time between months, especially when there is a problem.
For my bookkeeping purposes, should I be creating an internal invoice for each property, dated for when the PM is supposed to make the deposit (like the 10th of the month), and then match the deposit with the invoice?
If I invoice the property manager, then they can submit the payment from their checking account into mine automatically, which also automatically tags the income.
No way - do you have the time to do that every month? If you are entering money received would not you keep tabs on money spend by the manager?
So let me ask you first -- do you have a budget?
If you have a budget, all you have to do is compare it to the monthly summary report the manager gives you.
So if you do not have a budget - enter each month's summary and check your report by month.
Keep it simple. I rather you get the next deal. Trust plays a key role with your manager.
Check your agreement with the manager as to authorization on expenses.
A property manager should give you a monthly summary and detail statement by each property. If they are using any program, it takes them less than 1 minute to generate both the reports and drop it in something like Dropbox.
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