Whether you use QuickBooks for rental properties or Landlord Studio, the right tool to track your expenses will save you time and money.
It’s no secret that accounting isn’t always the most exciting part of running a business. Landlords know as much as anyone that it can be quite complicated, especially if you don’t have a good system in place. The great thing is that there is software out there to help make accounting easier.
If you’ve searched for professional accounting software before, you have probably come across QuickBooks. In this article, we look at the suitability of QuickBooks for landlords and explore how to set it up and use it for your rental property accounting.
Plus, we’ll outline its strengths and weaknesses when compared to industry-specific rental accounting software like Landlord Studio which is designed with landlords in mind.
You can view a direct feature comparison here.
You can use QuickBooks for real estate in several ways, including to track income and expenses associated with your rental property portfolios.
However, QuickBooks is primarily designed for small to midsize businesses. The same issues that make spreadsheets unsuitable for rental portfolios make QuickBooks a challenge to use for rental properties. Essentially, when tracking income and expenses for your rentals, you need to keep your finances for each property separate, ideally on a unit-by-unit basis. In fact, you almost need to treat each property as an independent business.
In terms of using spreadsheets, this means having a separate sheet for each property, which can quickly get out of hand. Similarly, the user interface for QuickBooks is not designed for individuals managing numerous separate accounts.
In other words, unless you’re skilled or have plenty of experience with QuickBooks, you may be better off using property management software. As it is purpose-built for landlords, it allows you to manage properties separately and is designed to make income and expense tracking as simple as possible.
Good property management software will also offer property management specific features, such as customizable reports, rental applications, tenant screening and online rent collection.
If you do decide to use Quickbooks for rental property accounting, follow these steps to set up your account and start entering rent payments.
It’s worth exploring some tutorials on Youtube that can walk you through the setup process.
Although it is the leading accounting software for small businesses, there are some limitations to using QuickBooks for real estate, particularly for managing rentals. In contrast, property management software like Landlord Studio has industry-specific features that are specifically designed to make rental property management easier.
The first limitation of using QuickBooks for a rental property is that it’s difficult to set up everything correctly. There’s always a learning curve when adopting new software but this can be particularly difficult when the software isn’t designed exactly for your purpose. As QuickBooks isn’t designed with landlords in mind, you need an even better understanding of the program before it will start saving you time.
The second major limitation is that QuickBooks doesn’t have industry-specific features. For example, although it facilitates invoice payments, it doesn’t have a tenant portal to allow your tenants to view historical and upcoming payments or set up automated online rent payments. In addition, it doesn’t have the functionality to send templated emails to tenants or automate rent reminders. Nor does QuickBooks have features like built-in tenant screening.
Finally, since QuickBooks is not targeted toward landlords, the support documentation and articles don’t provide industry-specific tips and there are limited educational materials to help you utilize the platform to grow your portfolio.
It’s for these reasons that more landlords are switching to property management software like Landlord Studio. Such software allows you to manage your finances by property or unit. Plus, it has common income and expense categories in the default settings. Other features include differentiating between rent and other forms of income, setting reminders, and keeping all your relevant documents and receipts organized in one place.
Improved organization and better, more tailored software solutions can mitigate (if not solve) many of the problems landlords face. As a result, landlords can streamline the management of their rentals.
With Landlord Studio, you can automate time-consuming tasks and communications, such as rent reminders and tenant auto-pay. Plus, you can track income and expenses on an organizational, property, or unit level.
With the countless rental property details landlords are forced to juggle, organized reporting is key to your success.
With Landlord Studio you can instantly generate over 15+ real estate specific reports, including your Schedule E reports, rent roll reports, occupancy reports, and rent ledgers and more.
SD House Guys, a company that buys houses for cash in San Diego, believes that proper digital reporting is what enables their rental property business to thrive. "We have 13 units, which means we need automated tools and reporting for our property management. Without them we would be incredibly disorganized and really not be able to get much done."
You can track your tenancies and occupancy rates and store lease documents. Landlord Studio keeps everything organized, including by categorizing your expenses. You can store all the relevant documentation and receipts in the same place., so you never have to go looking for them again.
Landlord Studio is not only easy to use but will scale with you as your portfolio grows. It does this by using a simple design and user interface along with industry-specific features that will optimize your property management processes.
Finally, Landlord Studio is committed to providing the best customer support. This ensures you’re able to set up your accounts quickly and make the of all the available features. This will minimize the amount of time you spend on your accounting and ensure your books are accurate and up to date. Landlord Studio is constantly developing new features and implementing product improvements based on customer feedback.
Landlord Studio helps you create a streamlined workflow, minimizing the time you spend managing your rental accounts. Once you consider the convenience of industry-specific features like automated rent reminders, lease management, rent collection, and reminders, it’s clear that Landlord Studio is the best solution for the day-to-day management of your rentals.
Landlord Studio is available on desktop, iOS, and Android, making managing rentals on the go easier than ever.
With that said, there’s a reason why QuickBooks is the leading personal accounting software. It’s an excellent solution for tracking your business’s income and expenses. This is why some landlords (typically those who have other sources of income as well as rental properties) choose to use QuickBooks in conjunction with Landlord Studio. Combining the two allows them to gain a complete overview of both their personal finances and their real estate accounts.
To help you use both together effectively, we’ve developed some advanced reports that you can export from the Landlord Studio app as .pdf or .csv files. You can save these to your device or send them straight to your accountant from the app.
We currently have more than 15 reports in Landlord Studio and are constantly improving these and adding new ones to the system. Every report is fully customizable and can be filtered by property and unit, income category, expense category, and date range.
Additionally, our accountant view feature allows you to invite your accountant to view your accounts and run any of your financial reporting. This not only makes tax time easier, but by giving your accountant the tools to review your business financials you enable them to better help you achieve your long-term financial goals.
On iOS, you can export your Profit and Loss report as an Excel file.
For detailed instructions on importing excel files to QuickBooks head over to their help page here: QuickBooks Support
Good bookkeeping is the backbone of any business. Whether you choose to use property management software like Landlord Studio or generic accounting software like QuickBooks or Xero, it’s vital you organize your books properly and keep careful records of income and expenses.
This is important because it gives you a better understanding of your property’s performance and ROI. It also allows you to accurately calculate your claimable expenses – a nearly impossible task if you leave this to the end of the year. Finally, if you are audited by the IRS or another tax body, you’ll have accurate, detailed accounts with all the necessary documents.
Landlord Studio allows you to quickly and easily track rental income and expenses, generate professional reports, reconcile with your bank, and more. It’s a great alternative to Quickbooks for landlords.