Bookkeeping question for beginner

9 Replies

I’m struggling with how to best perform bookkeeping for my property. I have one SFH right now, but do plan to purchase another property in the fall. Are you all using excel? Or, another program? Where can I find a good template to use? I though about using quick books, but my CPA said it would be over kill for one property. But then I thought it would be easier to start off with quick books than to convert 4-5 properties later. What are you thoughts? Thanks for all the help!

Hey Allen!

For super small operations, I think QBO is overkill. Is the functionality awesome? Absolutely. But if you’re going into a DIY bookkeeping system and not using a professional, you might as well get as much as you can for free to start.

I recommend using free software like Wave if you’re looking at DIY solutions. There’s no class tracking, but for super small businesses you just don’t need all that reporting. Memo in the property on your entries and save yourself $30-60/month.

Eventually it will make sense for you to move to QBO. When that happens you should (hopefully!) use a professional for set up, training, and outsourcing. I wouldn’t hop into a paid software until I knew I was using it the right way, or had a professional giving me that support.

I can tell you from experience that converting 4-5 properties between accounting softwares is not impossible. Don’t let that fear of the future keep you from growing your business today!

I despise QB's. Spent a lot of time and cash on it and I can get much more out of excel.

I have posted a link in the past to a free excel spreadsheet which I adjusted for my buildings- do a search

I also use excel to keep track of my amortization schedules as well as allocating property tax increase per unit based on sq. ft'age.

I have an accounting and bookkeeping background and don’t think you need anything but Excel for just a handful of properties. Go to the IRS website and download a copy of Schedule E for rental property income.  This will give you expense categories and make it easier for you. Good luck!

Originally posted by @Ben Day :

I recommend using free software like Wave if you’re looking at DIY solutions. There’s no class tracking, but for super small businesses you just don’t need all that reporting. Memo in the property on your entries and save yourself $30-60/month.

I also recommend saving yourself the money by using Wave Accounting.  Instead of using the memo to differentiate properties, I just make each property a new "business" in Wave. That also makes it easy to link a separate bank account to each "business" if that's how you do things.  The only drawback is that Wave doesn't give you and consolidated reporting across businesses, if that's important to you.  I have been using Wave for several years and I'm up to 5 properties now.

I come from a heavy accounting and bookkeeping background.  I was using excel and switched to Google Sheets for the portability of being able to update anywhere.  Its free and is Google's generic version of Excel.  It is missing a few feature of Excel but works well for me.

I have 8 properties and still keeping them on Google Sheets. Granted, my spreadsheets are probably a lot more complex than most lay person's real estate workbooks, but I will probably continue this way as long as I do my own books.  

@Allen Collier Good question. For one property you can definitely keep it simple as many have mentioned here. I think YNAB would be great for 1-5 properties. It's a personal finance (I use it)/small business software.

The budgeting side of it works great for planning cash reserves across each property. 

Good luck!

@Anna Buffkin

My wife's the same way. We're making the switch to Google Sheets. I still do all month-by-month cost tracking in Word and hand her lists, and she feeds them into her spreadsheets.