Quickbook Tenant Payments When Management Fees Have Been Deducted

Investor · Presque Isle, ME · Member since 2016 · 25 posts · 7 votes

Hello. I will be using Quickbooks Desktop for my 2018 booking keeping on long term rental properties. I am learning how to use it and practicing and am having trouble with a specific scenario.

I receive payments via deposit into a bank account from my property manager. He accepts payment, takes his fee, and deposits the remainder. How do I enter this so that the tenant gets full credit for their payment while at the same time the management fee is deducted, and everything comes out in the bank register as it should so I can reconcile my account. Thanks in advance.

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Cathie Kovacs

Rental Property Investor · Stamford, CT · Member since 2017 · 153 posts · 75 votes

Push the received payment to Undeposited Funds. When you select it to add to a bank deposit, add a negative line item to management fee expense. Tenant credit is correct and bank deposit is also correct using this method.

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Cathie Kovacs
Rental Property Investor · Stamford, CT · Member since 2017 · 153 posts · 75 votes
8y
Push the received payment to Undeposited Funds. When you select it to add to a bank deposit, add a negative line item to management fee expense. Tenant credit is correct and bank deposit is also correct using this method.
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Cara Lonsdale
Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
8y
Originally posted by @Cathie Kovacs:

Push the received payment to Undeposited Funds. When you select it to add to a bank deposit, add a negative line item to management fee expense. Tenant credit is correct and bank deposit is also correct using this method.
Wow. I stumbled across this thread, and am glad I did! That's a great tip. This software has so much potential, but it was a little confusing to navigate at first. I got it a couple of years ago, but still struggle with new issues.
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Matthew Olszak
Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
8y
Another way is to create a "bank account" in qb called something like "PM Rent Escrow". Then in QB, receive the tenant's full payment, deposit to that account, then make a journal entry debiting the pm expense account the fee taken and your real bank account the amount deposited by them, and credit the escrow account for the sum of the 2.
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Bettina F.
Investor · Post Falls, ID · Member since 2016 · 606 posts · 699 votes
8y
I am using an older version of QB, but this is what I would do: Set up your PM as a vendor and an expense account titled "PM Fee" Invoice your tenant for the full rent each month. Enter a bill for PM fee each month. When you receive your rent (less PM's fee), click on that invoice and record the full rent payment. This will zero out the invoice (and becomes your rent roll). Then record your PM bill as paid. Record your deposit.
This seems like a lot of steps , but it is fast once you get used to OB, and all your expenses will be properly recorded for tax purposes, as well as showing your rental income should you want to sell or refinance.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
8y
@Jeremy Dugal

Will the payments coming in from Property management gonna be consistent(same rental income less same PM fee?)

If this is the case - I would book the entry as

Cash(Debit) $900
Property management fee(Debit) $100
Rental income(Credit) $1.000

When you prepare your tax return you will know
$1000 is rental income
$100 is the property management fee
Income is 900
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