Why accounting software?

Question

Not sure if this is the right forum for this, please move the thread if it belongs somewhere else.

I'm very computer literate and I'm comfortable putting in the time and learning new programs. I've been a Quicken user for personal finances since around 1999. I love spreadsheets. With all that said, I'm not familiar with the lingo and features of accounting software like Quickbooks, Xero, FreshBooks, etc.

I'm going to be investing in single and multi-family real estate out of state. We'll be using a property management company. They use AppFolio, and I'll be able to log into their portal anytime. But I still have real estate business expenses I want to track, and I want to track each property myself. My thinking is that if I have all the data myself, I can analyze it however I want later.

I don't need software to actually manage the properties, but I do want something to track expenses and income for each property individually as well as overhead expenses for the whole business.

Is QuickBooks or similar the right tool for this? I'm leaning towards an online tool but without know knowing the lingo of accounting software it is difficult to determine which "level" of QBO or Xero or similar I would need.

Finally, would it be possible to run my personal finances with the same tool? For the personal side, I need transaction download for personal banking, credit cards, equity investments, and similar. It would be very valuable to me if I could reconcile my personal accounts and run my fledgling RE business in the same workflow.

Kelly Byrd · Answer

Here is where I ended up. I decided to just build what I want for now from spreadsheets, getting a feel for what I actually want the data to tell me. We're only dealing with a single property right now, and have a property manager for it, so I really only need the financials not a PM software. I'm sure I'll outgrow this, but by then I'll at least know what it is that I want.

Dan Schwartz · Answer

Sigh. I guess it was inevitable....

Gita Faust · Answer

Intuit does not foresee coming out with a new MAC version. But if you own MAC computer, you can install Parallels and use the PC version of QuickBooks. Win -win.If you have multiple QBO accounts, you can get discounts. So do not get discouraged with using QBO. But make sure you decide if you want to use QuickBooks as a property management software and accounting software.

Dan Schwartz · Answer

@Kelly Byrd I actually use QB for Mac. I don't usually mention that upfront, as we users still seem to be in the vast minority. Back in 2013, I was told that the Mac version was less functional as well. So I bought the PC version, downloaded a copy of Windows 7 from the University, installed it on a Boot Camp partition, and.....proceeded to never use it. I had no desire to re-boot into Windows every time I needed to do something in QB.A few years later, I bought the Mac version. I love it. I don't know what functionality I'm "missing," so I have no problems with it whatsoever. The export feature makes a Windows-compatible version, in case you need to send a copy to a Windows-based CPA (as I do). Quicken for Mac was never fully developed, and ultimately abandoned. Quickbooks is different.Yes, you could set up two companies, "Personal" and "RE Business," without any issue. You can only have one company open at any one time, and I don't believe the companies can talk to each other. If that's true, then you would have to manually pull some net data from the RE Business into your Personal file to have a true picture of Net Worth, etc. But you would have to do that regardless of which program you use for your personal accounts, unless you can find some way for "Personal" to query the closed database "RE Business."The deficiency of QBO is that you can only have one company per subscription. To have RE Business and Personal (or any future second company), you would need to have one subscription per company. This increases costs linearly. There are many benefits to QBO, I'm sure, but this one is a dealbreaker for me.

Mark B. · Answer

I'm not very experienced with this yet but I will say that I'm starting to use Quickbooks for my property. Haven't gotten too far into it but it seems to be a solid program for the needs you have. If you did want to keep it simple, you could just create or download some expense/income tracker excel sheets. Take the full report the PM company gives you but then use your own excel sheets to double check their numbers. Also, I would keep your personal stuff separate if possible. To me it seems cleaner that way. Unless of course all of the money is together anyway. edit - I use GnuCash for my personal accounting. Its an open source accounting software that doesnt seem to have a ton of bells and whistles (at least none that I've played with). Its rather simple once you set it up to track income/expenses with it. You could always set up both your personal and RE in there and it would be very easy to keep them separated.

Kelly Byrd · Answer

@Dan Schwartz: Thanks for the feedback. So one reason I'm steering away from the desktop version is that I'm on a Mac. From what I understand (and given my experience with Quicken for Mac) the Quickbooks for Mac is less functional than the Windows version. I could run the Windows version in a VM, or start converting my life away from OSX, but I don't see Quickbooks being the driving factor for that.So you're saying I could treat: "Personal" as a company and "RE business" as a company. in Quickbooks desktop. Will QBO not let me do that? What about some of the other online offerings? What about Quickbooks for Mac?

Dan Schwartz · Answer

I'm a data guy like you're describing, and I find Quickbooks Pro (desktop) to be the right program. The desktop version has a few advantages: 1) you can track multiple companies, with your personal life being a company if you so choose 2) no subscription fees. Buy it once, use it as long as you can. The main disadvantage is that Intuit will only support the program for three years. After that, they stop providing updates. A friend of mine who was using QB 2012 learned that the hard way recently. You can find "last year's" model at a discount in many places, but remember that it has a shorter supported lifespan.

Kelly Byrd · Answer

I'm looking at this for just tax prep, I've always been a "collect all the data you can, it'll be useful later" kind of person. Using just the PMs owner portal (AppFolio), I wouldn't have a complete picture of the overall business. It wouldn't even be a complete picture for the property, things like property taxes, closing costs, financing costs, etc.

Cody L. · Answer

Won't they PM give you an income/expense summary of your property that you can use for taxes? Their PMS does the accounting.