Accounting software recommendation for small landlord?

Question

I currently have 3 properties under an LLC and I'm in the process of finalizing a mid term rental but it will not be under the LLC(separate bank account). I have always used an excel spreadsheet to track/categorize all my purchases and then sent it to my accountant to prepare my taxes. I feel as I'm expanding that having an accounting software to track/categorize my expenses would save me time. I'm looking for something that is reasonably priced & will meet my needs as I grow. Bonus points if it has a feature that I can take photos of receipts and categorize them on my phone. Looking for suggestions from people who have been in a similar position, thanks in advance.

Stephen Nelson · Answer

So maybe this will provide some context.

I literally wrote Quicken for Dummies and also QuickBooks for Dummies. (The desktop version BTW... My long-time QuickBooks Desktop for Dummies editor David Ringstrom wrote the QuickBooks Online for Dummies book).

Here are my thoughts:

1. I think you save money by using a good accounting program-no matter which one--because you have instrumentation to watch your income and expenses and because you're less likely to lose deductions. You'll also be able to do better tax planning and forecasting. If you're in business, you want accounting software.

2. If you ever get audited--unlikely but still possible--you'll die without a decent accounting system. (BTW I love Excel. The first book I ever wrote was about Excel when it was brand new! But it's not an accounting system.)

3. Quicken I haven't used in a while... (we stopped revising Quicken for Dummies a few years ago after having published new updated versions every year for probably 20 years?) But that was a slick little piece of software. You basically kept your checkbook on a computer and then used classes to track income and expenses by property which is what you need for your Schedule E.

4. QuickBooks is very powerful. And it basically works like a super-charged version of Quicken. BTW... I make money indirectly when people buy "desktop" because a few of them buy my book on desktop... but I recommend "online" because it makes it so easy to collaborate with your accountant. BTW, QuickBooks (either version) lets you do full-blown real balance sheets which you need if you're doing a partnership.

5. In US at least, part of keeping QuickBooks Online affordable is getting or staying smart about using LLCs so you can have one copy of QuickBooks. You want to work with single entity and then use classes for each property. You can have LLCs hold individual properties. Those "property" LLCs can either by owned by the investor (so you, the individual) or owned by a "mothership" multiple member LLC with multiple partners... then in either case, the "property" LLCs should be disregarded entities... That'll mean one copy of QuickBooks and one set of financial records used by the individual. Or used by the partnership.

Markus Shobe · Answer

My clients use Quickbooks online. We use the class feature. Every class is a location. You can take pictures and assign them to transactions.

Jeffrey Lozon · Answer

Take a look at Stessa. Quickbooks is expensive and has more bloat than what is needed for a small landlord.

Chris Chisholm · Answer

I use the free version of Stessa which works great for my needs.  As a Canadian it has some restrictions like a lack of mobile browser/app support outside the US, but I'm sure for an American it would be great.

Max Emory · Answer

Hey @Alex Deal, we use QuickBooks Online exclusively for all of our REI Clients. I use it for my personal portfolio as well. We've found it has superior reporting features, integration features, and is overall more efficient to work within than other REI-specific software.

The downside is QBO is not set up for REI so you'll need to do that or work with an expert to ensure it is set up for your business appropriately. That's the key component that is usually missing when I hear other entrepreneurs/investors say they don't like QBO.

Something else to keep in mind is your entity structure and how your entities file tax returns. As a general rule, each entity that files a separate tax return (partnership, s-corp, c-corp, etc) will need its own QBO subscription. If entities are disregarded, you can keep up with more than 1 in a single QBO account using the location/business feature to keep track of them separately. This will save you on subscription costs.

Also, QBO has a receipt snap feature.

If you want to discuss any of this further, I'm happy to answer questions and help walk you through it.

Best of luck!

Alexis Sadler · Answer

Another thought too, with multiple properties, if you use QuickBooks Online Plus version, you can use the class code feature/module to track income & expenses by property.

Hope this helps!

Bill B. · Answer

If you click on the magnifying glass in the upper corner you can see the previous responses. (This literally asked monthly if not weekly.)

Until you have more than 25-50 properties you can use Quicken. (Quickbooks little brother.). It’s overkill but it’s much cheaper and easier to use.

Carlos Hennings · Answer

Agreed. Stessa has both free and paid versions.

Alexis Sadler · Answer

Hey @Alex Deal, I’d recommend QuickBooks—specifically QuickBooks Online—so you’re not limited by Mac or PC and can access it from anywhere (not just your local system). It has the ability to track & categorize all types of transactions, expenses, etc. and so so much more! QuickBooks also offers the ability to take photos/upload of your receipts and pull them in as an expense using the receipt capture feature.

If you have any questions, feel free to reach out, happy to walk you through the pros & cons of QuickBooks options! Plus, we’re an Intuit QuickBooks Solutions Provider, so if you do go that route, we can hook you up with a great discount on your first-year subscription, regardless of which plan you choose.

Accounting software recommendation for small landlord?

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