My parents own 3 rentals in the Chicago area (a two-flat and two single families). My dad self-manages and has always done the books himself with a spreadsheet, a notebook, and a pile of Home Depot receipts. I’m trying to help him get more organized before tax season.
For those of you who self-manage a handful of units:
What do you use to track income and expenses? Spreadsheet, an app, a bookkeeper?
If you tried an app and stopped using it, what made you quit?
What’s the most annoying or time-consuming part of keeping your own books?
For a small portfolio, one rental-only account plus a simple property-by-property ledger can be easier to maintain than a feature-heavy app. Log date, payee, property, category, amount, and a receipt copy, then reconcile monthly; a tax preparer can confirm the categories that fit his situation. General info only.
Liam, three rentals is still small enough that the setup matters more than the software. What I'd put in place for him before tax season:
One bank account used only for the rentals. Then the bank statement is already most of the books, and nothing personal gets mixed in.
One line per dollar in or out: date, property, who, category, amount. Use the Schedule E names as the categories (repairs, supplies, cleaning and maintenance, utilities, insurance, mortgage interest, taxes) so his preparer can total it without a single question.
Receipts photographed the day he buys, named with the date and the address. The Home Depot pile is where most deductions get lost, and it is the hardest thing to rebuild in March.
Mark repairs apart from improvements (a new roof, a new furnace). Improvements are usually written off over years, not all at once. That is the one question worth asking his preparer up front.
Ten minutes on the 1st: did every rent come in, and does the account match the sheet.
On why people quit apps: too much setup, and bank feeds that pull personal charges into the rental books. If he tries one, test it on a month with a repair and a late rent before moving everything over.
I built my own for my room rentals (RentCaddie), so I'm biased. A separate account and a clean sheet will get your dad most of the way.
Liam, with your dad’s two-flat and two single-family rentals, I’d keep rental money separate from personal and put a property column on every ledger entry. I save each receipt in a folder named for that property and spend ten minutes at month-end checking the ledger against the bank statement. I’d have his tax preparer confirm the repair-versus-improvement split before filing.
Three properties is the sweet spot for a simple setup, and the spreadsheet isn't really the problem. The missing piece is usually the routine around it.
Start with one rental-only bank account, nothing personal in it. Track each property separately, whether that's tabs in a spreadsheet or classes in an app, so a per-property P&L falls out without re-sorting at tax time. Every receipt gets photographed the day it arrives, not at month end. And tag each repair as repair or improvement when it's spent, because that tag decides whether it comes off this year's taxes or gets depreciated, and nobody remembers the difference in April.
Then run a short monthly close, twenty minutes or so: reconcile the bank account, match rent to the leases, and clear the uncategorized pile to zero. That's the habit that keeps it from becoming a shoebox again.
Apps usually get abandoned for the same reason spreadsheets do: nothing gets reconciled, so the numbers stop meaning anything and people stop opening it. The tool matters less than the monthly habit.
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