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Updated over 4 years ago, 07/31/2020
QuickBooks Pro?
As I am getting started in real estate investing, I want to make sure not to be trying to play "catch-up" starting on day one with keeping my books up-to-date. Quickbooks Pro is used in just about every industry; I am wondering if it is also recommended in REI, or if there are other programs that are recommended...
I am just looking for some quick feedback from individuals that are keeping their books updated that may have some wisdom in this area.
If you are a landlord than QuickBooks Pro is for you. You will need to tweak it, but there are books out there to teach you that.
If you are a Real Estate Agent and want to use QuickBooks you will need to tweak it to your Industry. I don't know if there any particular books out there to teach you how to use QuickBooks for REI.
Gita Faust may have a book for that, I'm not sure. She usually browses this site. So contact her.
Nancy Neville
@Alex Sanfilippo - Assuming you are talking about rental, not flip...
If you are just starting out, I would say Excel is enough. In order to use QuickBooks, obviously you have to buy it (you have to buy Excel, too, but most people already have one.) Also, it'll be very difficult to use without buying a manual book specifically designed for the landlords. Those will usually cost $100 or more.
If you are interested, I'll be more than happy to share the Excel spreadsheet I've been using. It shows things that QuickBooks can't show, like vacancy rate graph.
Soh Tanaka I'm interesting in seeing your spreadsheet. Thank you!
I own 20 units total and I've been using quickbooks pro. My accountant likes it and I find it easy to use but I know I'm not using it to the fullest. I also made up a small excel sheet to keep track of all the renters and how they paid and dates ect to be sure not to lose track of anyone. I keep detailed notes on that sheet i.e. If someone is late or leaving ect and some details on quickbooks when I record it so that I'm clear on who's payment it was. I keep the excel sheet in Dropbox as well so if need be I could access it if I'm not at my home office.
I use an invaluable app on my iPad called the" real estate evaluator "by real estate tools.com for my own personal use in locating a property that has the cash flow that works for me and I can update it easily anytime to see where I'm at.
These are my tips and what works for me. I'm sure after researching a bit you will figure out what works best for you and your comfort zone.
Good luck and enjoy the ride!
Janette Nason
Nason properties LLC
Sorry, I should have clarified, this is for rental properties.
Thank you for the feedback. @Soh Tanaka, I would like to see that spreadsheet that you are referring to. Thank you!
@Janette Nason - Thanks for the insight! I appreciate that, this is also something that I will be looking into.
QB is good, all accountants and CPA accept it. It's a really bad industry habit, but a lot of people use spread sheets to track everything in the industry, some track hundreds of properties just using spread sheets, which is really gross. There is nothing fancy you have to do, just learn about class types in QB and you can setup properties, customers, and reoccurring billing, then record the payments. You can get all your answers on the QuickBooks Forums. However, if your just talking about one or two properties you can easily keep that in a spread sheet, in your head, or in a book. However, I would jump to something that is geared towards your business like Buildium, that way your doing accounting correct, and you also getting everything else everyone is trying to simulate with spread sheets. I love me some QB, I know it well, but it hardly clears the gap once you get going.
Hi Alex. I am a Quickbooks certified proadvisor and a landlord of 4 units. Quickbooks is a great program and can definitely work for you. There are several versions so before you spend your cash, talk with someone about which version you need. That being said, excel will probably suit your just fine and it is easy enough to start your books on Quickbooks at a later time as you grow. The main thing is stay on top of the details from the beginning. I work with many clients that have the best intentions starting out but they let it fall behind until they get in "emergency mode". It's good you are thinking of this upfront. Best of luck to you.
@Soh Tanaka I am just getting started on my first project and would really appreciate it if you could send me the excel file you have referenced! I'm trying to make sure I get started on the right foot and don't develop any bad habits for future projects.
@Soh Tanaka I am just getting started on my first project and would really appreciate it if you could send me the excel file you have referenced! I'm trying to make sure I get started on the right foot and don't develop any bad habits for future projects.
@Soh Tanaka I would also love to get my hands on the excel file... thanks in advance!
Soh Tanaka can you please share your excel sheet. I would love to see what it looks like. Thanks
Alex Sanfilippo i've been researching the same topic for the past 3 days. Feel free to go see my posts to obtain more info from other members and users. I actually went on QB's website and spent a few minute with a chat agent who booked me a telephone appointment with a QB consultant. I received a call back within 24 hours and the consultant took his time to answer all my questions. QB pretty much seem to be an industry standard. I even got the recommendation from a local real estate accountant.
I heard some good things about Buildium and Quicken for Real Estate.
Hello all,
Though there are many versions of QB that are suitable, if you are truly just getting started there may be cheaper options. I am a CPA and also own a single investment property and I use Wave Accounting software. It is FREE and because I have a smaller scale operation it can handle everything I need. It links directly to my properties bank account making the whole process seamless. I know there are other free options available for small scale operations.
QB Online is going to cost about $30 a month. If your operation is large enough than I would definitely recommend some version of QB. But if not, maybe consider something free.
Luke
I use Quickbooks Online for my books. Currently I have 2 rental properties and I love how I am able to use class/property tracking for every transaction to properly record my transactions based on property. When I pull a balance sheet, income statement, or any other report I can easily see the breakdown of each property and the totals.
To me it is worth the $30/month and will only become more valuable as a scale and grow larger. It is nice learning the processes and perfecting while things are small and manageable!
You may still want an accountant or CPA to help you setting up your books properly (such as property basis and correct journal entries for depreciation). I'm an accountant and testing for my CPA exam now, so I already had a good grasp on how to use the software and how to do my own books.
Thanks again everyone for all of the feedback on this! Very helpful.
@Soh Tanaka - Would you mind sharing your Excel spreadsheet with me, as well? I'm a new investor and any help with keeping my records would be appreciated. Thank you!
@Soh Tanaka yet another request for your spreadsheet please :) I'm checking out Wave but wouldn't mind taking a look at your spreadsheet for ideas.
Thanks in advance!
To all consultants, coaches, mentors SHOULD teach about reading a financials and teach accounting 101. I would love to team up with you to help others.
And you as a business owner should either:
1. Learn accounting and bookkeeping or
2. Hire someone to do it for you
You are spending way too much time and money doing something you are not good at.
Originally posted by @Soh Tanaka:
@Alex Sanfilippo - Assuming you are talking about rental, not flip...
If you are just starting out, I would say Excel is enough. In order to use QuickBooks, obviously you have to buy it (you have to buy Excel, too, but most people already have one.) Also, it'll be very difficult to use without buying a manual book specifically designed for the landlords. Those will usually cost $100 or more.
If you are interested, I'll be more than happy to share the Excel spreadsheet I've been using. It shows things that QuickBooks can't show, like vacancy rate graph.
@Soh Tanaka - Hi Soh, If you still have a copy of the Excel spreadsheet would you mind sending me a copy as well. I'm a new investor and would like to to track my expenses.
I'm still running on the desktop QB Pro 2009 edition.
@Alex Sanfilippo as others have mentioned, you can manage your accounting without a software solution for your first few rentals.
The first option is to create a separate checking account for your property and ensure that all transactions related to that property flow through that bank account. In December, you can easily log all of your income and expenses based on the monthly bank statements from your checking account. Super easy.
The second option is to log the income an expenses in a spreadsheet as you go. This is a better method than the one stated above but requires ongoing commitment which is honestly tough for most business owners.
The third option is to use software to help automate portions of your accounting. Personally, I recommend that landlords use Xero and flippers/developers use Quickbooks. The reason is that Xero provides for a much better user experiences. It's easier to manage and navigate. On the other hand, Quickbooks provides accounting power that flipper and developers need but that landlords can do without.
yo @Brandon Hall, Mr. show196
I was thinking about your comment on the separate checking account for each property.
I can understand where receiving funds into separate accounts works, and possibly paying people with checks, but we are a credit card nation. Even my lawn guy takes credit cards. do you suggest using debit cards with these account?
I like the miles i get from my Credit cards. What is your suggestion when you need to purchase supplies? a separate CC for each property/LLC as well?
@William E. you can use a credit card, just make sure you are paying the credit card off with the property's bank account.
@Brandon Hall - Thank you for your comments! I appreciate it. I'm still learning a lot here at BP.
@Soh Tanaka Hello Soh, may I have a copy too. Many Blessings,
@Soh Tanaka yet another request for your spreadsheet. We will be starting with property #1 later this month, or early January. We'd like to start on the right foot. Many thanks!