How do you make purchases and manage receipts for your rentals?

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Michele FischerPro Member
Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
9y

This can be all over the spectrum of options, I would think.  We keep things pretty simple.  

We have a separate rentals bank account and checks that we try to use for as much activity as we can.  When we make a purchase, by any means, the receipt gets thrown in a paper bag hanging on the wall near my desk.  Each week I go through the receipts, write on them what the purchase was and what property it related to and it goes into a folder for the end of the month.  Monthly we reconcile our accounts and match up the receipts.  I have two big envelopes, one for rental improvement receipts and one for rental normal receipts, by year.

Weekly we also gather up the miles traveled for rentals and log it so we have it readily available at tax time.

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  • Michele FischerPro Member
    Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    This can be all over the spectrum of options, I would think.  We keep things pretty simple.  

    We have a separate rentals bank account and checks that we try to use for as much activity as we can.  When we make a purchase, by any means, the receipt gets thrown in a paper bag hanging on the wall near my desk.  Each week I go through the receipts, write on them what the purchase was and what property it related to and it goes into a folder for the end of the month.  Monthly we reconcile our accounts and match up the receipts.  I have two big envelopes, one for rental improvement receipts and one for rental normal receipts, by year.

    Weekly we also gather up the miles traveled for rentals and log it so we have it readily available at tax time.

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  • Josiah Kay
    Rental Property Investor · Wauwatosa, WI · Member since 2017 · 156 posts · 99 votes
    9y
    I setup a separate checking and savings account for my rental property. I pay all the rental related expenses out of that checking account and keep the security deposit in the savings account. Accounting for all expenses at the end of the month is easy. Also, I just save all my receipts in a physical folder specific to the property.
    1Reply
  • Beth L.
    Investor · Hagerstown, MD · Member since 2014 · 299 posts · 140 votes
    9y

    We keep two separate bank accounts for rents received and security deposits, for each rental. We also have Visa debit cards for the main checking account so we can pay bills or order things online. I use Quicken Rental for my accounting software. The use of categories and tags really helps to keep things linked to the right property. The physical receipts can be scanned and added to that transaction in Quicken for easy access later, then they are kept in folders according to property until tax time.

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  • Ralph R.
    Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    9y
    I let the Property manager track all my expenses for each rental. They pay all the bills and send me an accounting at the end of the month. I can view it online and download it and save it. At years end they send me a year ending statement that I forward on to my CPA. This is the best part of hiring a pm. RR
    1Reply
  • Roger S.
    Investor · TX · Member since 2015 · 393 posts · 290 votes
    9y

    We use an airlines rewards card for most purchases.   Every week I pay the card off out of my maintenance account.  I have a file for each unit, I have a sheet on my wall that tells me the distance to Home Depot and all other places we buy things from.  I write the mileage on each receipt, stick it in the file.  Sometimes it may be several months before I reconcile, but it works for me.

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  • Brandon Hicks
    Investor · Avilla, IN · Member since 2013 · 796 posts · 769 votes
    9y
    I own all my properties through a single LLC. I have accounts at several different local hardware stores...with those accounts we charge, it's categorized by property on the statement I get at the end of the month. Everything else is paid for with individual company checks or charged to a Menards card. I don't pay for anything "personally"
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  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    9y
    Having a software really saves time. I've never heard of quicken rental as mentioned above, but I don't like quicken online much. I like Xero and can track multiple properties and flips. It all personal preference and I'm sure other people love quicken. Either way excel and hand writing stuff is utterly painful to even think about. I manage a ton of bills and rentals and large rehabs over multiple entity types with 15 mins a week and xero. Best $25/month per entity I could spend. Take the time to learn a software. Our company uses Propertyware for our clients, but it still isn't a true accounting package and more geared towards property management. Good luck. But one LLC regardless of property number is cheap. It can start to get expensive as you have lots of different entities. Still worth it though.
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  • Samantha Klein
    Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
    9y

    I have a folder for each property on the computer and when a purchase is made, it gets recorded in Excel then the receipt gets placed in the coordinating rental folder. This has worked very well. I use a rewards credit card for most things mainly for the extra money savings. 

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  • Daniel Smith
    Flipper · Crown Point, IN · Member since 2017 · 15 posts · 10 votes
    9y
    We also use Xero. Use the app to record and take a pic of the receipts then we don't have to keep physical paper. You can mark each transaction to keep track of what property the expense is for.
    0Reply
  • Ed S.
    Investor · Oskaloosa, IA · Member since 2014 · 126 posts · 65 votes
    9y
    I keep a 3 ring binder for my paid invoices (in date order). At year end, place those invoices in a gallon size zip lock bag. Then label what year it is. I use QBO (Quickbooks On Line). It's a bad As_ learning curve. But you can set up re-accruing payments (mortgages, life insurance, etc.). QBO can be set up to mail invoices. You can set those notices to be also sent to yourself, if you wish. I believe Fresh-books is a name that I'm hearing more frequently too. "Old Fart"
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  • Jonathan Blum
    Rental Property Investor · The Dalles, OR · Member since 2016 · 38 posts · 42 votes
    9y

    I use a Schedule E worksheet in Google Sheets and have one for each property.  As I spend money, I go onto the Sheets app on my smartphone and log the expenses in the category they were spent in real time.  I then write the property name and item on the top of the receipt and put in a bag.  At the end of the year I turn all of these schedule E worksheets over to my tax preparer.  I estimate this daily habit as I spend money saves me $1500-2000/year vs hiring a CPA to do all of my accounting.  I use this to manage expenses for 20+ units.

    1Reply
  • Rodney Morris
    Charleston, WV · Member since 2017 · 47 posts · 12 votes
    9y

    i have started using an app called Everlance. i like it very much so far. it tracks mileage and expenses. it allows you to set up favorite locations and different vehicles. it has categories for personal, work, and medical. the expense tracker allows you take photos of the receipts so i don't have to have large stashes of paper for long periods of time. 

    as for paying for things, i do have an llc and business checking/savings however there is very little money in there as we are just starting out. most of my expenses have been put on 2 personal credit cards or paid from my personal account. i knows it's a bad idea but currently have no other options.   

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  • Jurgis Kirsakmens
    Investor · Riga, n/a · Member since 2015 · 61 posts · 23 votes
    9y

    I track all my rental related purchases with Landlordy app (adding also photos or pdfs of expense receipts). At the end of the month I just export all expenses as spreadsheet with photos and send to my accountant who does the rest.

    1Reply
  • Bill HamptonBusiness Member
    Accredited Investment Fiduciary, AIF®, Financial Planner, Tax Strategist, Real Estate Investor · Atlanta, GA · Member since 2012 · 2k+ posts · 979 votes
    9y

    I recommend the free version expensify.com to my clients for expense and mileage tracking. Set up an LLC and a separate business bank account. Get a credit and debit card from the bank for expenses. Link the bank account online to Expensify and put the transactions in to categories (travel, supplies, repairs, etc). Technology will save you time and money. Hope this helps.

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