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All Forum Posts by: Kristen Ambrose

Kristen Ambrose has started 0 posts and replied 23 times.

Post: Expense tracking when I pay for repairs (I use property manager)

Kristen Ambrose
Tax & Financial Services
Posted
  • Accountant
  • Posts 23
  • Votes 10

If you are already using QuickBooks, it should be fairly simple to include both the expenses paid by you directly and those paid by the PM. The way I do this in QBO is to record a journal entry at the end of each month using the property management statement. This includes the rental income, PM fee, any repairs, etc. For example: 

DR. PM Fee Expense $100

DR. Repairs Expense $50

CR. Rental Income $1000

DR. Cash $850

This journal entry will then be matched to the transaction in your bank feed where you received the monthly payout of $850 from your property manager. 

This way, QBO is the source of truth rather than the PM statement.

Post: Self Tracking / Bookkeeping System

Kristen Ambrose
Tax & Financial Services
Posted
  • Accountant
  • Posts 23
  • Votes 10

QuickBooks is a great option for tracking rental property income and expenses, but there is a cost associated with it. You can connect your bank and credit card accounts and transactions get pulled in automatically, you just have to code them. 

If you're looking for something free, I agree that excel could still be a good option for you at this point. It will just be more time consuming and error prone. 

Post: Rental balance sheet

Kristen Ambrose
Tax & Financial Services
Posted
  • Accountant
  • Posts 23
  • Votes 10

Hi Babu,

A simple rental property balance sheet will have the following accounts:

Assets: Cash, tax and insurance escrow, fixed assets and depreciation

Liabilities: Credit cards, security deposits, and loans

Equity: Opening balance equity, owner's contributions/distributions, retained earnings and net income

There could be a number of reasons that your balance sheet does not balance. Here are the sample journal entries for the accounts you mentioned:
1. Owner cash contributions:

DR. Cash (Asset)

CR. Owner's contributions (Equity)

2. Purchase of property with cash:

DR. Building (Asset)

DR. Land (Asset)

DR. Closing Costs (Asset)

CR. Cash (Asset)

3. Credit card purchases 

DR. Rehab Expense (Expense, which contributes to NI within Equity)

or DR. Capital Improvements (Asset)

CR. Credit Card (Liability)

Your balance sheet starts off balanced, so each transaction should keep the accounting equation Assets = Liabilities + Equity true. Perhaps one of your transactions was booked incorrectly. Hope this helps!