Bookkeeping software suggestions?

Question

I'm a new investor and recently purchased a duplex in Indiana, with the intention of investing in a second property relatively soon. My partner and I are using the IN property for short and medium term rentals and it's finally starting to cash flow.

As of now I've just been recording the transactions in an Excel workbook, but I would love to find a bookkeeping software that will take all of the bank account / transaction data and generate reports / display a big picture overview of how the property is performing. Surprisingly, I haven't been able to find one that seems to fit exactly what we're looking for.

I have been thinking about using QuickBooks, but have read mixed opinions on how well it works for real estate investors - especially for investors that have (or plan to have) multiple properties in their portfolio, with different LLCs and bank accounts. Does anyone have any suggestions? Curious what other investors out there are using.

Thank you!

Jeff Nash · Answer

Like many CPAs and tax professionals, I’ve been using QuickBooks Online.  There are other a few other reputable providers.  For what it’s worth, I demoed Azibo yesterday after connecting with @Vicki X.on here.  It seemed to have many of the functionalities I would expect and like to see, and my understanding is that it’s free.

Nathan Gesner · Answer

Software is a common question on BiggerPockets. Here are some things to consider:

• Most investors don't need software until they have 5-10 rentals. All you need is a single place to track tenant information, payment history, maintenance, and a few other things. You can easily do this on a spreadsheet and it will take less time to track than it would to find and learn a new software. If the software is not simplifying your life or making you more accurate, you shouldn't use it.
• Software does have extremely helpful features like online payments, marketing syndication (click a button and your property is advertised on multiple sites), electronic document review/signing, maintenance tracking, and owner reports. But do you really need that for your one rental?
• There's no perfect software out there. Every system you try will have flaws or you'll salivate over a feature that shows up in other software.

Some common names you'll see thrown around a lot: Stessa, Apartments.com, RentRedi, TenantCloud, Innago, RentManager, Avail, Rentec Direct, Doorloop, etc.

I recommend you search for each of those apps online and see what they offer, how much they charge, etc. Make a simple spreadsheet or written list with the features of each and see which ones appeal to you most. Try to narrow it down to your top 3-4. Once you have a short list, get an account with each one and run them through the wringer to see how they really function. Do one task at a time in each app so you can compare apples to apples.

• Load a property with pictures and details.
• Market that property.
• See what your marketing looks like from the public's perspective.
• Submit a fake application to see how easy the process is.
• Run a credit/screening report on yourself.
• Enter a maintenance request, assign a vendor, attach a fake invoice.
• Enter charges to the tenant's ledger.
• Enter recurring charges and automatic late fees.
• Sign documents electronically.
• Run owner reports.

After testing a few apps, one of them should stand out for you. Choose that one and use it. No system is perfect, so don't waste your time chasing after the next shiny object. You should only have to change when your current software has a flaw or lacking feature that is causing you to spend too much work on a work-around. Then you can consider researching and finding something that meets your needs better.

Ragan Manning · Answer

@Nicholas Joseph congrats on your new investment! In regards to software, I use QBO and I’m a REI bookkeeper. I think it works very well and I personally don’t have many problems with it. I’m not a huge fan of buildium because the accounting side (to me) is lacking. I’ve heard appfolio but I haven’t had the chance to work in it yet. For QBO, you would need the QBO plus at minimum and your COA set up correctly. If you’re doing LTR, after that’s set up correctly, it’s pretty straight forward.

Kevin Sobilo · Answer

@Nicholas Joseph, quickbooks can work fine for multiple properties. Its a generalized accounting software not specialized for real estate. There are some features in the more expensive subscriptions levels that would make handling multiple properties simpler, but for a small number of properties working with the lowest level subscription called "Simple Start" will work fine.

I do recommend hiring a bookkeeper to handle the bookkeeping or at least to set it up and help you get started. I found hiring out bookkeeping one of the easier things I have been able to hire out and well worth the investment.

Also, multiple bank accounts isn't an issue at all. I have quite a few accounts as I employ the "Profit First" cash management system which requires many accounts.

With multiple LLCs, I believe people who do that often have one LLC that manages the other LLC's properties and track everything through that one LLC.

Lady Diana Ruiz · Answer

We use Wave and we like it!

Brian W. · Answer

I am going to try QuickBooks online

Kaja Baum · Answer

I tried Quickbooks and it was a disaster. You need to be well versed in it to make a system not set up for real estate do real estate. I know there are a number of software options out there for RE investors but with a smaller portfolio, it didn't make sense to pay the high fees. I ended up with STESSA. Lower cost, extremely intuitive, and they are continually making improvements. I'm a big fan.

Vicki X. · Answer

@Jeff Nash Thanks for the mentioning, and it was great chatting with you! @Nicholas Joseph

Azibo, Stessa, REIhub are good rental accounting options that offer income/expense tracking, financial reports and tax reports (Schedule E). Your life will be much easier by switching from spreadsheets to software like them. Azibo and REIHub support double entry accounting. Stessa doesn’t as of today. Cost wise, Azibo is free. Stessa has the free and premium versions. REIHub is paid.In case other rental management features also matter for you, Azibo and Stessa offer business bank accounts. Azibo also providers many property management features. REIHub is purely accounting.   Some investors and many CPAs use Quickbooks too. But it’s not as friendly as it’s not designed for real estate and could quickly get pricy.Hope it helps! Let me know if you'd like to learn more.

Rene Remington · Answer

If you have your system in excel set up and it's works.  Why go to the extra expense at this point?

Basit Siddiqi · Answer

I normally recommend Quickbooks Desktop, Quickbooks Online, Stessa or Xero.Best of luck!

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