I Need a Bookkeeping Solution!!!

[Erik Trefzger]

I've been trying to figure out a bookkeeping solution for years now, and I just can't seem to find one.  I own 5 properties (8 units), but would like a system that could easily scale up when we purchase more properties.  I have two property managers (one locally, one out of state), so I don't need an all-in-one system that tracks vacancies etc.  I just want a simple bookkeeping solution that is easy to use and can be real estate specific.

What I've tried in the past: Excel was fine for the first few properties, but then it got too cumbersome and I'd like a more elegant solution.  I then tried QuickBooks and just hated it.  I don't want to do double-entry accounting, and it was annoying setting it up with classes, jobs, etc to try to get it to fit real estate.  I then tried a local bookkeeper but she was quite expensive and it still required me to do a lot of work myself.  The following year I outsourced the bookkeeping to someone in New Jersey for only $100/month, but the results were very poor; he just lumped everything together and didn't even separate the properties income/expenses/etc.  It also seemed like I was still doing too much work.  

One thing I learned from trying to outsource my bookkeeping is that I have to understand how to do it before I try to hand it off to someone else.  I want to hand the books off after I find a solution and can do it myself (since bookkeeping is my least favorite part of this business), but there has to be a simple system for someone like me.  

So here's my wishlist, does anyone know if anything out there comes close?

- Cloud based (ideal but not necessary)

- Easy to use

- Separate expense/income tracking for individual properties

- Generate reports for all properties as well as individual properties 

- Import from bank accounts, although I would need to manually separate those transactions.  For example, I get paid a couple of lump sums from my property managers every month, and one $5000 payment might represent 4 rent payments and 9 different expenses

- Separate mortgage payments into principal/interest/escrow transactions

- Track escrow payments from mortgage companies and escrow balance (ideal but not necessary)

I'm looking at freshbooks, Xero, and Wave, but if anyone has experience with this let me know!  I don't need an all-in-one solution, just a way to track what my property manager sends me!

[Erik Trefzger]

So to close this loop for now, here are the results of my research.  I'll write a quick description of each system I considered and why I used or discarded it.

The winner:

- Xero is what I am plugging forward with (thanks for the recommendation @Gita Faust .)  It is like QB in that it is a real accounting software, but it seems much more intuitive, less glitchy, and a true cloud based product that feels much easier to use than some alternatives.  It is easy to set up for a real estate specific business and it allows me to track multiple properties with the tagging feature, so I can drill down on how each property is performing as well as a group of tags (properties) which is nice if you want to run reports on a certain portion of your portfolio.  Finally, it has a bunch of short videos that explain how to use it and set it up, and the customer support is knowledgeable and got back to me quickly every time I had a question, making it possible for a non-accountant to figure things out on their own.  Check back with me in a few months to see how I'm liking it.  Once I get a handle on things and have a few months under my belt, I plan on handing it off to a bookkeeper, with the bonus of understanding what is going on behind the scenes without doing the work.

The runner-up:

- Lessaccounting.com was a close second, and I played around with it for a few hours setting up my books.  It is easy for us non-accountants and the support is also quick and thorough when replying to questions.  They also use tags that work great to drill down on individual properties.  Ultimately I chose Xero over lessaccounting because the traditional accounting styel seemed a little more standard and therefore easier for me to pass off to a bookkeeper.  For someone who plans on maintaining the books themselves, this could be a good choice.

The also-rans:

- Buildium seemed like a good product, but has so many property management features that I wouldn't use.  I was looking for a simple bookkeeping solution, but this could be good for someone who is more hands on with property management.

- QuickBooks is something I used for a while and I couldn't stand it.  You know it's a bad sign when the "for Dummies" book is three inches thick.  Also, the interface seemed outdated and stuck in the 90s.

- QuickBooks Online felt like a ported version of the desktop version, not a true cloud solution.  Missed lots of features important to a real estate business, and the interface was glitchy.  Reviews of it are also very poor.

- Quicken Rental Property Manager was a product that I was going to try... and then I read the reviews on Amazon.  People hate this software so I didn't waste my time.

- FreshBooks had a nice properly designed interface and I gave it a try, but their rep told me it is meant for service-based businesses and mainly focuses on invoicing.  

- GnuCash is a free option and perhaps good for people who enjoy spending time on their books and with the software.  It is open source and thus pretty flexible, but wasn't the simple solution I was looking for.

- Wave is another free option that could be a good option for some of you out there.  It is supported by ads and felt a little clunkier than Xero.  I also read some feedback from people stating it could be hard to scale with, but the likely depends on your own threshold for hours/month spent on it.  

- Property Solutions rep told me that they are only for MF averaging 30+ units/building.

That's it, hope this helps someone else out there because that's eight hours of my life I'll never get back.  Looking forward to getting current with Xero and then removing my least favorite part from my business!  If I missed any good options out there, feel free to let me know.