How to manage bookkeeping for rental real estate

[Alex Tang]

Hi,

Im in the process of closing on my first deal and will try out managing the property myself for the first year.  What software do people use to manage the bookkeeping? Excel? Quickbooks? Or is there some other program that is inexpensive and relatively easy to use?   Thanks!

Alex

[Pat Ferguson]

Hi great question,I too wanted to know if there is a certain pattern of format on paper to present to the Banks to certify that cash flow is collected from the rentals consistently and now I would want to impress upon them to assist me with further investment properties.How do I go about this?

[Michael Glaspie]

Banks/Lenders etc will simply look at bank statements when doing underwriting. For taxes, you want to be as organized as possible. Excel can do the same thing as QB as far as automated calculations if you set up the formulas in advanced. However, it is the individual documents that make all the difference. Individual leases, receipts, invoices, work orders, etc. 

I use quick books for my portfolio because of the ease in creating financial reports. This allows me to quickly review my financial position. 

I also use SmartVault to maintain all of my individual documents. 

There are appfolio and a bunch of property management software programs that can meet and exceed your expectations. I think it is more important to ask yourself, how organized are YOU. I knew I needed a centralized location for everything because if left to me on an Excel document I would more than likely drop the ball somewhere.  

[Jake Kinoshita]

@Alex Tang

To be honest, if it is only one property, excel will be good enough.

A lot of people use Quickbooks or Quicken i guess but it was too complicated for me.

If your property is actually big, maybe Appfolio or Buildium are good choices. 

I use a property management software, Beaver as it is a good for me, an individual investor.

[Melissa Ward]

Some property management software offer book keep capabilities.  There are also reports that can be run for schedule C, P&L's etc - which are super helpful to keeping track.  My 2 cents is - start with a low cost property management system now and as you build your portfolio, you will be set up for success. 

[Alan Caceres]

@Alex Tang I have to agree with Jake, if it's just one property, you don't need all the extra expense of using specialized property management software. It should be simple enough to just do it on a spreadsheet. If you just want to track cashflow, do your accounting on a cash basis. If you want to track performance, do your accounting on an accrual basis. If you don't want to think about that stuff and feel you can stomach smaller cashflow for one property, go with a property management software like Beaver.

If you need help with doing your own accounting feel free to message me, I love chatting about real estate and bookkeeping.