How do most landlords track tenant security deposits and refunds? Do people just use a pencil and paper or is there specialized software for this? Or is there a third hidden option?
Up to 30 units I could just remember it all. Up to 100 I made some spreadsheets to keep track of everything including security deposits. At 100 and something I started using rentmanager. It's pretty robust and doesn't charge by the unit which irks me.
I use Excel to keep up with it all. I have a tab for each property and a summary tab that adds up everything from the individual tabs.
I keep up with deposits, dates rents are paid, late fee per property, trash pickup day, which Magistrate is used for eviction tenants contact info. Login info for section 8 website where applicable etc.
I use QuickBooks. Different classes for the different units with security deposits recorded by name on the balance sheet. I can view reports by class which also shows a total column.
It's whatever works for you. For just a few units, you could use an Excel spreadsheet or perhaps even just notate on the lease (both the tenant's copy and your copy) the date that the deposit was received and the deposit amount. Depending on your state, you need to know the date the deposit was received to accurately calculate accrued interest. (Again, not all states require that a security deposit accrue interest, but if they do require it, they will state the required interest rate.)
Just my two cents on tracking security deposits using QuickBooks.
- Do not add each tenant's name on the Balance Sheet. Your report is going to be loooooooooooong.
- Instead create a Invoice or Sales Receipt for each tenant using Security Deposit Item and Account.
- Security Deposit account should be a Liability Account
- Customize your report for Security Deposit by Customer (tenant) and see the magic.
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