QuickBooks - Using the “Cost of Goods Sold” account type

[John T.]

I am a landlord who manages my own rental property. I do not manage property for other owners. I set up my chart of accounts in QuickBooks to include, among others, two types of accounts: (1) Cost of Goods Sold accounts and (2) Expense accounts. I use the "Cost of Goods Sold" account type as a substitute for "Property Costs," meaning all costs specifically related to the rental properties, including, but not limited to, property repairs & maintenance, property taxes and property insurance. I use the "Expense" account type as a substitute for "Overhead Costs," meaning all non-property specific costs of operating the business, including, but not limited to, office expenses, office supplies, office telephone, office internet and postage. Each rental property is a separate Class (as well as a separate Customer; Tenants are Jobs).

When I run a Profit & Loss Report, the general categories that appear in the report are Income, Costs of Goods Sold (Property Costs), Gross Profit, Expense (Overhead Costs), Net Ordinary Income and Net Income (The words “Property Costs” and “Overhead Costs” do not actually appear in the report).

Using the “Cost of Goods Sold” account type as a substitute for “Property Costs” works wells for me. However, I am not a tax lawyer or a CPA. My questions are: Does anyone else in the rental property business use the "Cost of Goods Sold" account type as a substitute for "Property Costs?" Are there likely to be any unintended consequences in using the "Cost of Goods Sold" account type as a substitute for "Property Costs?"