Quickbooks - Lost in the Sauce

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How do you structure your Quickbooks for real estate investing? More specifically, how do you track profit and expenses for each property (by classes? customers? rentals?) What is a good resource for Quickbooks that is REI friendly?

I have several businesses and have used QB for years.  I have been buying rental properties for about 7 years now.  For my real estate holding company, I switched away from QB about 5 years ago.  I still use QB for my management/contracting business and love it.  For rental properties, however, I don't like it.

We checked out several property management specific software programs and ended up going with Rent Manager.  When we made this switch, the features and capabilities of Rent Manager were far above what we needed at the time, but I was looking to grow considerably and wanted to grow IN to our software instead of growing OUT of our software.  When we switched we were managing 2-4 family properties and had a total of maybe 12 units under management.  We now have about 125 units under management, including a mobile home park.  We still don't use anywhere near it's full capability.  I was particularly pleased when we added the mobile home park because not only did it easily handle that change, we also started using more features that we hadn't previously had a need for.

My experience with owning several businesses has been that it usually pays to find the right fit than it does to make it fit.  In my opinion, QB is not well suited for somebody that is looking to manage properties.  If your business is largely flipping or wholesaling, it might fit much better.

With all of that said, I have read that there are some sort of add-ons (can't remember what the right term is) that can be plugged in to QB.  I did look into them when we switched and decided that wouldn't do what I wanted for our property management.

On the negative side of our decision, QB is MUCH more user friendly as an accounting software.  However, the trade-off we made switching to a property management specific software was still well worth it, even if the accounting/bookkeeping portion of it is not as user-friendly as QB.

Not sure if that helps answer your questions, but at least gives you a few things to consider.  Proper setup is key to getting good information later on and involves a lot of work/thought.  Proper setup of the proper software is even more important to get the best information later on.

Good luck and happy investing!

Originally posted by @Bob Couture :

How do you structure your Quickbooks for real estate investing? More specifically, how do you track profit and expenses for each property (by classes? customers? rentals?) What is a good resource for Quickbooks that is REI friendly?

We organize each property as a class. So running a P&L is easy on a property basis with a simple report where the filter of "Class" is set to the property. You can also click on 'Multiple classes...' and select a group... if for instance you want to build a report on property types (e.g. all SFR, all units in an apartment, all property in a specific city, etc.)

Google Landlord Accounting...I have no affiliation other than using their training material myself. I can't speak to other types of accounting software and as @Adam Johnson  mentioned it may be better to switch. For me personally, at this point I have my stuff set up in QB and it is done for now, but it's on my list of questions to ask my new CPA. Based on her input I may look to go to something else...we'll see.

As a rehabber, we use quick books, track all properties by class. Works Great.

Today I'd NEVER use any accounting package that runs locally on a PC.  What if that PC exploads, crashes.  Yes backups but just too much of your business is at risk and non IT folks just don't appreciate the need for property "image" not just data backups.

There's a few web based accounting systems now, that's the way to go.  QB has web based too...

For my PCs I use Acronis True Image.  Full image back up.  99.99999% of folks don't appreciate how difficult it is to reload a PC's software.  Often you don't have the installer file anymore.  Data backup is wholly in-adequate.  Jump drives, USB drives get lost and fail as well.  

I use the free version of https://www.rentecdirect.com

If my accountant likes it then I'll continue using it and maybe even upgrade to the subscription side. 

I'm managing 9 properties with Quickbooks and love it. I had a consultant set it up a few years ago. There's a big learning curve but the reporting function, among others, is extremely robust. @Nancy Neville is the resident QB expert on BP :)

Take it away, Nancy!

I should add that we run both QuickBooks and Rent Manager online versions.   This adds accessibility from anywhere.  We have a regular office, but being self-employed means weird hours so we can access anything from anywhere with an internet connection.

In the long run, the thought is that with online versions we can access our books while sipping drinks on a beach somewhere...but we aren't to that point yet. :)

Okay.  If you want to know some things QuickBooks does, here it is.

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by Nancy Neville

1) use classes for properties.

2) I use spreadsheets for the rent ledgers - and just record the general deposits and don't worry in QB who the rent was from.  Spreadsheets are also nice to print out and you can format them in a way that makes sense for the tenants as well in case you ever have to print out a rent ledger.

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