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All Forum Posts by: Kristen Ambrose

Kristen Ambrose has started 0 posts and replied 30 times.

Post: non LLC , use personal checking account to pay mortgage and bills or open a separate

Kristen Ambrose
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

Congrats on the triplex purchase! It's definitely a good idea to get in the habit of tracking expenses related to that property separately. I prefer using Quickbooks to do this. This will be really helpful come tax time especially if you have other properties or plan to buy more. 

Post: Software for management and agent

Kristen Ambrose
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

My property management clients like both Appfolio and Rentmanager. 

Post: Share some good college degrees that go along with real estate investing!

Kristen Ambrose
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

I've found the accounting and personal finance courses I took in college to be the most helpful in growing our real estate investing business. 

Post: Real Estate Accounting Winner: REIHub

Kristen Ambrose
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11
Quote from @Kenneth Jenkins:

Great overview.  Thanks, we have multiple entities and QBO has turned very costly as a result.  I will definitely be checking out REIHub.

Where are your properties in Detroit?


 Hi Kenneth, 

Just wanted to note here that it is possible to have multiple entities within one QBO subscription as long as they have similar business purpose (real estate investing). In order to do this, you need to have the Plus subscription and use the Business field for entities and the Class field for properties. 

Post: Rental balance sheet

Kristen Ambrose
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

I typically book cashback credit card rewards as a DR. to Cash and a CR. to Other Income. The Other Income line should be below your Net Operating Income on your P&L and flagged as credit card rewards so it isn't taken into consideration for taxes. 

Post: Bookkeeping Services needed

Kristen Ambrose
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

Hi @George Omae,

Seems like you have a lot of great bookkeeping options here, but I'd also invite you to check out my page. 

We specialize in bookkeeping for REIs and can make sure both your ST and LT rentals are accounted for accurately. We'll provide you with monthly reporting so you know exactly where the business stands and year end will be a breeze. 

Post: Beginner House Hacker - Book Keeping

Kristen Ambrose
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

I use QuickBooks Online for all of my real estate investor clients. They find the reporting useful month to month to see how their properties are performing but also everything is done come tax time.

 Income Digs has great YouTube videos on how to tailor QBO for real estate investors if you're looking for a DIY approach or some education on it. 

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

Kristen Ambrose
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

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
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

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
Posted
  • Accountant
  • New Jersey
  • Posts 30
  • Votes 11

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!