Quickbooks Duplex bookkeeping: AirBnB and Long Term Rental

[Michael Chizhov]

Hey all, I set up two sets of books, one for my LTR and one for my AirBnB. The LTR has the mortgage on it, the payments, etc, and the rent from the LTR pays most of the debt on the property. But not all.

I'd like the AirBnB to cover a portion of the mortgage as well.

My question is: how should I approach this in QB? Should I just do periodic Owner Draws from AirBnB books and Owner Contributions to the LTR books? Or do I make one a vendor and the other a customer and use a monthly bill transaction (seems like this would create an expense trail which doesn't really exist...)? Or should I approach it as an intercompany transaction, with liability and asset accounts?

The goal is to keep track of how much the AirBnB is contributing to the overall mortgage per month, and how much it's making above and beyond that. I'd rather not use classes/divisions for this.

Thanks in advance!

[Jana Cain]

@Michael Chizhov One option is you could create an expense account in the AirBnB books ("LTR Mortgage", for example) and use that account when you do the transfer/write the check (the entry would be a check or expense transaction with you/your LTR business as the vendor, and "LTR Mortgage" as the expense account). On your AirBnB P&L, you'll see all of those payments listed as the aggregate LTR Mortgage expense. In the LTR books, you could book it to equity as an owner contribution, or book it to wherever you currently book the mortgage payment (which will net against your usual payment out of LTR funds). If you want to see the contribution on the LTR P&L, you could create an other income account for the mortgage contribution ("Mortgage Contribution", for example).

Your original idea of booking draws/contributions between the two activities is fine, but it doesn't inherently tell you what the transfers are for, since you could transfer funds between the two activities for any variety of reasons. If you intend to do only do these transfers specifically for the mortgage, it could still work, but if you do transfers for other reasons, it may get murky. My suggestions are based on the presumption that you want to see at a glance what the AirBnB contribution is. 

I should note that if you go the income/expense route (vs draws/contributions in equity), you'll want to make sure a book-to-tax reconciliation is done at tax time to ensure the actual profit and loss of each activity is accurate. This should be done anyways as a check that everything is in order, but it's particularly important in this case since you're "mixing" transactions from two separately reported activities.

I hope this helps!