Financial Software for Rentals?

Question

Currently only own a Duplex.

Hello, what is a good program to use for tracking Income and Expenses for tax purposes?Also where can I set up an online payment method?

Would prefer lowest cost with a quality product.

Nathan Gesner · Answer

There are free systems for accepting rent online. Check out Cozy or search this forum.

Excel spreadsheet is more than sufficient. Learn what expenses are tax deductible and be sure to track them separately.

Russel McMillan · Answer

I would echo what everyone else on this thread has said. Use an excel spreadsheet to mirror the Schedule E. Use a separate bank account account for each property. I only have one duplex and I run everything for that property through the same account. Since I have only one property, I track general business expenses through the same bank account (for things like my G Suite subscription and to pay my accountant). My accountant gave me a spreadsheet to use that is already set up to differentiate between general business expenses and property specific expenses so you can more accurately track how your property is performing. If you have a CPA, maybe you can ask them if they have anything you can use. Also, just for good measure, I use MileIQ to track mileage. I also use Expensify to track receipts.

Federico L. · Answer

I wouldn't make it too difficult at the beginning.

Software: A simple Excel spreadsheet will do.  You can set it up to parallel the Schedule E categories: https://www.irs.gov/pub/irs-pdf/f1040se.pdf

Payments: Encourage tenants to do electronic payments (mobile payments). Nowadays all US banks offer free payments to emails or phones. You can set it up to get alerts when payments arrive.

Once you have more units, it will be worth exploring other options...

Alan Rohrer · Answer

@Shane Welch

@Federico L. and @Nathan G. are absolutely correct. At this point, no need for more than a spreadsheet.

What I've found helpful (even at this small level) is to at least have a separate checking account you run all your payments and expenses through. Also make sure you keep or take a picture of all your receipts.

This way during tax time, all your income and expenses will be in one place and you won't have to sift through a personal bank account that has rental items buried throughout. And if the IRS ever comes knocking- you'll have all your receipts saved to prove your expenses.

Once the spreadsheet gets hard to manage as you add more properties, you can switch over to something like QuickBooks or another online accounting platform.

Anthony Asciutto · Answer

Quicken is a nice solution, but there are other solutions out there with the features you need at no cost to you.

Sebastien Hitier · Answer

excel is not bad for 1 property, otherwise intuit software stuff (the reviled incumbent), the unusable and technologically inept gnucash, the up and coming https://www.xero.com, or the free http://www.investor-realestate-accounts.com/ , this is the one I work with, and it has accounts for real estate rental operation and does double entry.

Let me know what you think.

Jeff Bridges · Answer

I use quicken and have 5 units. Its scalable, inexpensive and easy to setup your properties to you can import and tag transactions by property and then categorize by IRS categories for easy end of year reporting. It already has the IRS categories setup in the dropdowns to make it a breeze.  It downloads transactions from all of the major financial institutions related to rentals so all you have to do is tag and categorize once a week/month depending on your preference and add any memos to help you remember the transaction. Be sure to use the home and business version that supports rentals and schedule E reports for end of year to share with your CPA. Right now the best price for a 27 month subscription is on amazon for $95. Totally saves you time at year end tax time and makes sure you maxmize your deductions by not leaving out the little things you would otherwise be too lazy to add if you had to do it all at tax time. Software purchase is also deductible at tax time as a bonus.

Shane Welch · Answer

This is one duplex, I plan on adding another multifamily every year.   I think I will use Quicken for rentals it looks decent.  Or if anyone knows a decent program?

Anthony Asciutto · Answer

I think everyone's opinion is valid, but there are a few more questions you should ask yourself.

• Do you want to collect rent online?
• Would you like to screen your tenants online?
• Do you plan on adding more units?

If any of those answers are yes, you may want to use a free option in parallel with or instead of a spreadsheet. It is a bit of a pain to have to backfill/import data into a software solution after the fact.

Financial Software for Rentals?

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