Need a new accounting system!

[Joseph Hammel]

Hello! I have been using excel for my accounting for 6 years. However with 38 units across 14 properties its becoming an issue. I do use Buildium to do applications, background checks, rent collection, tracking ect. Buildium has expense tracking but I don't really understand how to use it and I don't see how the information can be translated to the items on a sched e. Buildium seems to be more suited to property managers that manage others property. 

Question 1. Are there any Buildium users that fit my profile (property owners)? Do you use it for expense tracking?

Question 2. Can anyone recommend an alternative. Ex Quickbooks. If so what specific version? Include cost if you can.

Question 3. Should I just hire an accountant? 

Thanks!

[Michael Plaks]

@Joseph Hammel

If you're hiring professionals at these rock-bottom prices ($650 for your business is ridiculous - an equivalent of day labor prices for construction) - then good for you. Well, I hope it is good for you because I have not seen his work.

What it means is that professional solutions for REI accounting are probably outside of your comfort zone cost-wise. For example, QuickBooks Online is an excellent software but it costs $70/mo at the proper level (Plus). The entry-level version of QBO (SimpleStart) is only $10/mo but it's underwhelming for your needs and requires shortcuts.

Here's the bad news: I'm not aware of any accounting software, including QBO, Xero, Peachtree etc. that is suitable for correct recording of REI books out of the box. All of them require customization and training.

I've been in this business for over 20 years and have seen books of thousands of investors. Out of these thousands, maybe 10 people were able to set up their books correctly on their own, and these folks had some accounting background. Everybody else created some kind of a mess - from mild and easily correctable to (usually) total disaster. 

And investors who paid major bucks to professional bookkeepers did not fare much better at all! REI bookkeeping is so complicated compared to regular business (like a Realtor or Uber, for instance) that you need to hire a bookkeeper who specializes in REI. A few of them can be found on this forum, but they will not be working in the $650 universe, I'm pretty sure. Generic non-REI bookkeepers are not worth hiring, trust me.

In my firm, we ended up creating a proprietary bookkeeping system on the QBO platform, specifically for REI. It does the job perfectly, but it's not cheap and not available for purchase except for our clients.

Because of this landscape, the best solutions for serious RE investors are - believe it or not - are two extremes: either free Excel/GoogleSheets apps or expensive custom system. Midway is usually neither here nor there: you invest a lot of time and money and still get poor results.

And all of the above can/should be ignored if you use a tax professional like you do. I highly recommend that you adopt whatever system is endorsed by your accountant and not by the BP community. Because if you implement a BP recommendation, then bring the results to your tax guy and he tells you that he cannot use this data for tax purposes (which happens a lot!) - what good does it do to you? If one accountant rejects your data, chances are that the others will do, too. Or charge you to redo your work.