What accounting software do you use for real estate holding companies?

Question

I have a main company, that owns a bunch of LLCs, each LLC holds a single real estate asset. 1 of the LLC also acts as a management company for the entire portfolio.

Now it creates a problems that with each LLC, I need to file a tax return each year. and so far I am doing them by excel copying numbers from bank statement, which is a nightmare.

Quickbook online charges $24 each month in Canada, which really adds up with the number of holding LLCs. and I don't feel like what I require from it justify the cost. I literally just need to categorized income and all types of expenses.

Do any of you properties investor have a recommendation on what accounting software to use for these type of set up? or even better is there some tricks to set up quickbook with one account but handling all these companies?

Thank you for your time.

Max Emory · Answer

Hey @Patrick K., I'd still recommend QBO but using it differently than you currently use it.

Adopt QBO Plus, and as long as all of your entities are "disregarded" for tax purposes, you can use the location/business feature to track each individual entity all within 1 QBO subscription.

If any of your entities are a "filing" entity (file a separate tax return; partnerships; corporations; etc), those entities require their own QBO subscription.

Happy to discuss further.

Hope that helps!

Thomas Talbert · Answer

Given you also have a management company to do books for I would suggest the more expensive option of getting a management software that has accounting capabilities so that all you would have to keep track of on a spreadsheet is the management company. Simply issue each of your real estate LLC's a 1099 from the management software every year and then handle your management company spreadsheet out of the back end of the PM Software. Door Loop would be my first stop for someone of your size. I have never used it but they are built for something about your size.

Hope this helps!

Chris Seveney · Answer

I think the problem is your entity setup. you have way too many things going on. why do you have one llc for one asset? Are these commercial assets?

Alexis Sadler · Answer

@Patrick K. Totally hear you on how the cost of the QBO subscriptions adds up over multiple entities. One work-around for QBO would be to have a single subscription for QuickBooks Plus and utilize class codes or locations for each entity. While class codes or locations work swimmingly for a P&L, it gets a bit tricky on the balance sheet. If you go this route, I'd definitely invoke the help of a QBO expert to help you set it up and get it organized so that you don't end up with a big mess on your hands.

But, if all the entities already have separate bank accounts, CC's, etc., this definitely makes this process a lot cleaner & easier to manage.

I've done this for a few clients, and my ops director does this for her personal property investments that are all held in different entities/holding companies, so it can be done! Just takes some understanding of how these features in QB work & making sure everything ties out at each period end so you can stay on top of it!

What accounting software do you use for real estate holding companies?

What accounting software do you use for real estate holding companies?

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