Expenses by property - an accounting question

13 Replies

How do you keep your rental property expenses separated by property? I am trying to come up with a good system that doesn't require a ton of work on my part.

Do you have a separate credit card for each property? Do you go through each transaction and classify it to the correct property? 

By the way I have vacation rental properties so I end up having a lot of transactions I would like to classify by property.  

Thanks in advance for any feedback or advice!

During rehabs, I'll go through all receipts a couple of times per month and categorize them to each applicable property. Outside of rehabs, there's not a ton of transactions so once a month is usually sufficient. 

Use Quickbooks.

Define each property as a CLASS name.

Then both income and expense is associated with a class.

The PnL can then report BY CLASS

I use Xero for an accounting system. I've set up each property and business venture as a separate project. If the expense relates to a project, I just click one other drop down box to assign it to that project.

You could emulate QB Classes by adding a column CLASS to expenses & income.

Assuming you have dates, sort by type{Income,Expense}, Class, Date

I like to keep it simple, for me and for my accountant. EXCEL spreadsheet with a separate tab for each property serves me well.

Vacation Rentals here too, it can be a headache with different bills coming in and supplies and all that. I use Evernote and Expensify to help reduce the strain. 

Evernote - Has a built in scanner you can use on your smartphone that takes excellent clear scans  of receipts from anywhere (No carrying around paper). These can also become searchable text if you need to find and reference them later. You can quickly, scan, label, categorize and tag these. 

Expensify - Automatically imports your credit card or bank account data. It also has a receipt scanner that automatically fills out all the information (Date, time,  store, amount) and then can match it to the data. It also creates an ereceipt if your charges are less than $75 so you don't even have to bother scanning a receipt. (I normally don't use it as I prefer Evernote for my receipt storage as I reference them often and it is much easier to search. But it's personal preference). I can then categorize them (accoriding to IRS rules) and tag with different houses or even send them to separate house expense reports. At the end of the year I can just print these reports with all the attached receipts and send to my accountant, or myself if I'm doing it. 

Once you set your workflows up which is maybe an hours work total, it works really well. On Mondays all I have to do is see what expenses have flown in to Expensify and attach any necessary receipts. Send them to the separate house expense reports, and add in any charges that weren't on my business CC or from my business account. 

Thanks everyone for your input!  @Blair Russell - thank you it is good to hear from another vacation rental person!  Do you use accounting software? If so which one?  I was just wondering how well expensify would integrate with something like quickbooks.

Expensify has Quickbooks integration but I don't use it. I don't really see the need for accounting software yet in my life, things are still relatively simple. 

Hi @Tina Allaire

If you're looking for something simpler than accounting software, there are property management software options available that would do exactly what you're looking for but are easier to use for those who are not accountants. You can find a few in the BP marketplace, or you can send me a message. I'd be happy to give you a suggestion:)  

@Blair Russell Which software do you use that integrates with all the booking sites?

Thanks @Adrienne Henley for the suggestion.  Because I have other businesses besides RE I want to stick with something consistent across all of them such as quickbooks.

Originally posted by @Tina Allaire :

Thanks @Adrienne Henley for the suggestion.  Because I have other businesses besides RE I want to stick with something consistent across all of them such as quickbooks.

 Good choice, as you learn one product instead of many.

Just be sure to create a separate set of books for each type of business.

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