All Forum Posts by: Cathie Kovacs

I would set up your own bookkeeping system (QuickBooks?) and then enter the property management activity as a monthly summary. This way you captured it all in one place. Granular details on tenants etc. are not in your bookkeeping system (would be redundant). 

Full disclosure: I’m a bookkeeper and do not use property managers (I self manage). 

See item 14. 

ADUs do not make a property a multi family house. You need to live there yourself. 

There are a lot of variables but if you’re looking for generalities, I’d say your bookkeeping costs should be  about 1% of gross rent per year, depending on how many meetings you want and how often you want everything updated (weekly, monthly, quarterly). Worth every penny to know where you stand financially, know that it’s correct and have someone that you’re CPA can communicate with.  Preparing your tax return should be a breeze since your bookkeeper has done all the heavy lifting.

Full disclosure, I own a remote bookkeeping firm. We charge a monthly fixed fee. Some charge by the hour (hard to know what it'll cost). Look for software proficiency, experience and REI knowledge. Beware the lady you know at church that does "bookkeeping" for $20/hour. We make a lot of money every year cleaning up their messes.

You can’t. Loan payments are reflected on the balance sheet, not the profit and loss (principal payments aren’t deductible anyway). 

If your looking for cash flow, see the statement of cash flows, not the profit and loss report. 

 Jeff, with respect, I disagree. Not to hijack this thread, but a computer will never know if what you bought at Home Depot is turnover expense or a capital improvement....or how to interpret that into the current tax code and handle it appropriately. 

Having said that, none of us doing our own dental work, right? Yes, you can learn and you should understand what your financial reports mean but I’d suggest outsourcing to a qualified bookkeeper with an understanding in real estate. 

Desktop. Ok. Then one company file for each entity. Use classes on the rentals. 

 Google Quickbooks setup rental property. Nerd Enterprises is a good one to watch. Not sure if you’re planning on using Desktop or Online so I can’t narrow it down any further. My firm hasn’t done any videos but I can help with setup if you need it. 

You might want to have someone experienced help you with set up so that you get it right the first time. 

Use classes for every transaction. 

 I’ll try to dig up some links for video training for you   

All deductible. 

Property specific costs should go on that property’s Sch.E (mileage etc). 

For general costs, continuing ed etc. just as sole proprietor real estate investor. 

As the owner of a bookkeeping firm that deals with CPAs all day long, use Quickbooks for both (rentals & flipping). Cozy is great for rent collection. Not much else. You’ll need to provide a profit & loss report for each entity you have.  You can accomplish this in one QuickBooks file if you must, using classes.