Quickbooks - Lost in the Sauce

[Bob Couture]

How do you structure your Quickbooks for real estate investing? More specifically, how do you track profit and expenses for each property (by classes? customers? rentals?) What is a good resource for Quickbooks that is REI friendly?

[Adam Johnson]

I have several businesses and have used QB for years.  I have been buying rental properties for about 7 years now.  For my real estate holding company, I switched away from QB about 5 years ago.  I still use QB for my management/contracting business and love it.  For rental properties, however, I don't like it.

We checked out several property management specific software programs and ended up going with Rent Manager.  When we made this switch, the features and capabilities of Rent Manager were far above what we needed at the time, but I was looking to grow considerably and wanted to grow IN to our software instead of growing OUT of our software.  When we switched we were managing 2-4 family properties and had a total of maybe 12 units under management.  We now have about 125 units under management, including a mobile home park.  We still don't use anywhere near it's full capability.  I was particularly pleased when we added the mobile home park because not only did it easily handle that change, we also started using more features that we hadn't previously had a need for.

My experience with owning several businesses has been that it usually pays to find the right fit than it does to make it fit.  In my opinion, QB is not well suited for somebody that is looking to manage properties.  If your business is largely flipping or wholesaling, it might fit much better.

With all of that said, I have read that there are some sort of add-ons (can't remember what the right term is) that can be plugged in to QB.  I did look into them when we switched and decided that wouldn't do what I wanted for our property management.

On the negative side of our decision, QB is MUCH more user friendly as an accounting software.  However, the trade-off we made switching to a property management specific software was still well worth it, even if the accounting/bookkeeping portion of it is not as user-friendly as QB.

Not sure if that helps answer your questions, but at least gives you a few things to consider.  Proper setup is key to getting good information later on and involves a lot of work/thought.  Proper setup of the proper software is even more important to get the best information later on.

Good luck and happy investing!