Today, Quickbooks is one of the most popular accounting tools for all types of businesses. It’s especially a great option for small to medium size property management companies who are looking for an affordable accounting solution they can tailor to their workflow.
There are lots of other options available for property managers from the lowest cost like using spreadsheets to track expenses and profits to a more expensive all-in-one real estate accounting and management software like Buildium Property Management. Depending on your business, you may prefer one of those options, but QuickBooks is, in a way, the Goldilocks of accounting software for real estate businesses.
Why Quickbooks is a good option for your real estate business
The Quickbooks Desktop software application is often rated highly for all types of real estate businesses from home flippers, long-term investors, property managers, and independent agents and brokerage firm. The desktop version requires you to download the software to your computer and costs $299.95 for the Pro version and $499.95 for the Premier version.
Pro and Premier both allow you to:
- Run detailed profit and loss reports for each property you own or manage
- Add up to 5 users for Premier and 3 for Pro
- Connect bank/credit card accounts
- Track rent or commissions received
- Track sales by customer or listing
- Track rent advances and/or deposits
- Track vehicle mileage
- Track income and expenses for each property
The main drawback of using Quickbooks for your real estate business is that it doesn’t come out of the box ready to start managing your finances. You’ll have to spend some time customizing the program for your specific company needs. While this may take some time to set up initially, it allows you to build the program you want regardless of the size of your portfolio or number of units you manage.
There is also a cloud-based alternative to Quickbooks Desktop, QuickBooks Online, if you don’t want to download the software. This is usually recommended for real estate agents and brokerage firms since they conduct a lot of business on the go and will want to access data from any device. Unlike the Desktop version, it also is billed monthly instead of a one-time fee.
2 Quickbooks Desktop Tips for Property Managers
We’ve talked about the pros and cons of using spreadsheets for property management. Using a program like Quickbooks Desktop is definitely a step up from a spreadsheet, which means you’ll have to invest a little more money into it, but it’s a good fit for most small to medium-sized property management companies with less than 20 employees.
For landlords, small self-managed HOAs, and property managers handling several properties with less than $1 million in annual revenue, it’s a great option to help you track your finances.
These recommendations work best if you are tracking multiple small to medium-sized properties. It’s not ideal if your property management business deals with several large properties, business offices, or multiple residential complexes.
Before you get started in Quickbooks, here are some quick tips to help you manage your finances, properties, and owners/tenants easier:
- Create two different company types: “Rental Property company” and “Property Management company”(or “HOA company”)
- Know when to set up property owners or the property as the “Customer”
Create two different company types: “Rental Property company” and “Property Management company”(or “HOA company”)
Quickbooks Desktop lets users set up company files that makes running your property management business easy by doing tasks such as receiving and tracking rent from tenants, paying property owners, charging fees for property maintenance, and other expenses and revenue.
As a property manager, you’re really performing the tasks of two companies: the rental property or HOA property, and the Property Management company. You’ll want to keep these two separate.
- The Rental property or HOA property tracks the income and expenses for your clients’ properties
- The Property Management company is your company that will need to track management fees and overhead expenses
If you are a single, self-managed community association, you can designate the “Property Management company” as an “HOA company” instead.
Keeping these two separate will make things much easier when it comes time to do payroll, file your company taxes, bill your clients, or determine if you should expand your business and target a specific market over another based on the revenue of your current properties.
While QuickBooks Desktop allows for you to create multiple company files with one license, QuickBooks Online requires you to pay for an additional subscription for each company you add to an account.
It’s important to complete each company file information completely because this section will affect the contact information that appears on invoices, sales receipts, and estimates that you send to your clients.
Know when to set up property owners or the property as the “Customer”
How you set up your “Customers” and “Jobs” within Quickbooks will depend on what sort of property management company you have.
If you are managing long-term or short-term rental properties, be sure to set up the property owners as the “Customer.” You can add customized fields to describe each property owner. Some information you might consider including:
- Reporting preference (how often the owner wants to receive reports)
- Reserve (how much money the owner wants you to set aside for maintenance expenses)
- Accountant name (some owners may want you to also send information to their accountant to help them with financial decisions)
You’ll also want to be sure to set up tenants as jobs and attach them to the unit or house they occupy. The Customer: Job list also stores information about each tenant, like a contact name, phone, property address, and work phone.
You can also create categories by tenant type like:
- Vacation/short term renter
- Residential manager
If you are managing property for a community association, like an HOA or COA, designate the property as the “Customer” and the owner or tenant as the “Job”. Each job has a start date, which in the case of the property will indicate when the owner bought the unit. This makes it easier to track what a previous owner owes in dues and assessments or if someone prepaid and is owed back money.
Manage your revenue from Estoppel or HOA Resale Certificate Requests easily
We know that property managers have a lot on their plate. Implementing and training staff on new accounting software is just one of the many responsibilities you might be tasked with. Dealing with Estoppel or HOA Resale Certificate requests can be tedious and overwhelming on top of it. That’s why we created solutions for HOA/COAs, property managers, and closing agents to send and receive the information they need painlessly.
When it comes to your company’s finances, Estoppels.com helps property managers by collecting your revenue for estoppel requests upfront via credit card, leaving your accounts receivable for this line item at zero. You can easily access this information from your financial dashboard and enter it into your accounting software, eliminating one less thing for you to balance in your books. So, whether you are using QuickBooks, a Google Spreadsheet, or some other program, you can easily track this information.