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Rental Accounting

Should You Use QuickBooks For Rental Properties?

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When people think about accounting for their business, there is an almost audible mental groan. Then, inevitably, people start looking for solutions to make this easier. This is no different for landlords – which is likely how you’ve ended up here.

When searching for professional accounting software for your rentals it’s likely that you’ll have come across QuickBooks, you may even have tried it or another solution out already but may have struggled to make it work for you. In this article, we explore how QuickBooks can be used for managing your rental property accounts.

And we outline its strengths and weaknesses when compared to industry-specific bookkeeping software like Landlord Studio which is designed with DIY landlords in mind.

Can QuickBooks Be Used for Rental Properties?

The short answer to this question is yes. You can use, and people do use, QuickBooks to track the income and expenses associated with their rental property portfolios.

“QuickBooks Desktop allows you to set up a company file that lets you run your property management business and do tasks such as receiving and tracking rent from tenants, paying property owners and management companies, fees and overhead charges for property maintenance.” Source: QuickBooks

The long answer though is that it’s not quite so simple. QuickBooks is primarily designed for small to mid-sized businesses. The same issues that make spreadsheets unsuitable for rental portfolios also make QuickBooks a challenge to use. Essentially, when tracking your income and expenses for your rentals you need to keep your finances for each property separate. The result is that the finances for each property need to almost be treated as an independent business.

When setting up spreadsheets this means having a separate sheet for each property and this can quickly get out of hand. Similarly, the user interface for QuickBooks is not designed for individuals to be managing numerous separate accounts.

This means that unless you are skilled or have a lot of experience with QuickBooks, you may well be better off exploring a property management software that is designed to make income and expense tracking for your properties as simple as possible while simultaneously offering property management specific features.

quickbooks for rental properties

Setting Up QuickBooks For Your Rental Property

Setting up:

  1. Add your business banking cards.
  2. Create your properties as customers.
  3. If you have an HMO/ Multi-unit property you should create your units as jobs.
  4. Create your tenants as sub-jobs.

To enter rent received:

  1. Click on the customers’ menu,  and select receive payments to begin entering your rent receipts.
  2. Choose the cash receipt account from the accounts drop-down list.
  3. Select the appropriate tenant from the Customer: Job drop-down list.
  4. Enter the amount of the rent payment. Click “OK” to save the receipt if you are inputting rent for only one tenant. If you have rent from more than one tenant, select “Group with other undeposited funds” to move on to the next cash receipt entry.

It’s well worth exploring some demonstration videos on Youtube to help you through the setup process. 

The Limitations of QuickBooks for Rental Properties

Whilst QuickBooks is the leading accounting software for small businesses, it has limitations when it comes to managing rentals. Property management software like Landlord Studio has industry-specific features that are designed for the very purpose of rental property management.

The first limitation of QuickBooks when it comes to property management is that it’s a challenge to get everything set up correctly. There’s always a learning curve when it comes to learning new software, however, when that software isn’t specifically designed to do what you’re asking it to then you need end up needing an even more nuanced understanding of the program to make it work for you and for it to actually start saving you time.

The second major limitation is that it doesn’t have industry-specific features. For example, whilst it facilitates invoice payments, which could be used for rent collection, it doesn’t have a tenant portal or auto-pay for tenants. It also allows you to track your tenants, but it doesn’t have the ability to send templated emails to tenants or automate rent reminders. Nor does it have features like tenant screening built-in.

Finally, because it’s not targeted at landlords their support documentation and articles don’t offer the same depth and breadth of industry-specific knowledge and educational materials that will help you utilize their platform to grow your portfolio.

This is why more and more landlords are moving to property management software like Landlord Studio. It is already structured by property and set up with common income and expense categories, it can easily differentiate between rent, and other forms of income, allows you to set reminders, plus you can keep all your relevant documents and receipts well organized all in one place.

Using Landlord Studio instead of QuickBooks for your rental property management

Many of the problems experienced by landlords can be made easier (if not solved) with improved organization and the use of better, more tailored software solutions. This can help landlords streamline the management of their rentals.

Automation

With Landlord Studio you can automate time-consuming everyday tasks and communications, such as automated rent reminders and tenant auto-pay. Plus, when it comes to managing your accounts you can track income and expenses on an organization, property, and unit level.

Reporting Designed for Landlords

What is more, you can instantly generate a number of customizable reports instantly, reports that are designed specifically for landlords, such as a Schedule E report, rent roll report, occupancy report, and a rent ledger.

Track Tenancies

Additionally, you can track your tenancies and occupancy rates, store lease documents everything is properly organized with expenses categorized. And, all the relevant documentation and receipts can be stored in the same place.

Scalable

Because Landlord Studio is designed with landlords in mind it is set up to not only be easy to use but to scale with you as your portfolio grows. It does this with a simple design and user interface along with industry-specific features designed to help optimize your property management processes.

A Focus on Customer Support

Finally, at Landlord Studio we focus on supplying the best customer support possible so that you can not only get your accounts set up quickly in the system but also make sure that you make the best use out of all our available features to save you as much time as possible and ensure that your books are accurate and up to date. Plus, we are constantly developing new features and product improvements based on customer feedback.

Property management software gives a rental manager or landlord all the tools they need to run a successful business.

landlord studio is better than quickbooks for rentals
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Using Landlord Studio with QuickBooks

Because Landlord Studio is specifically designed for creating a streamlined workflow for landlords, minimizing their time spent managing their rental accounts combined with industry-specific features (like automated rent reminders), it makes sense to use Landlord Studio for the day-to-day management of your rentals.

You can track income and expenses on an organization level, on a property level, and all the way down to a Unit level. And we have apps for iOS and Android making managing on the go easier than ever.

With that said, there is a reason that QuickBooks is the leading personal accounting software. It is an excellent solution for tracking your business’s income and expenses. This is why some of our landlords (normally those with other sources of income as well as their rental income) choose to use QuickBooks in conjunction with Landlord Studio to gain a complete overview of both their personal finances and their real estate accounts.

To use both in conjunction with one another we have developed a number of advanced reports which can all be exported from the app as PDFs or .csv files. These can be saved to your device or sent straight to your accountant from the app.

Additionally, you can give your accountant direct view-only access to the reporting functionality on Landlord Studio to allow them a complete overview of your finances.

landlord studio property management accounting

Landlord Studio’s Reports

We have over 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.

The reports can all be shared directly from the app via email or downloaded as a .csv file or a pdf file.

Additionally, we recently launched our accountant view feature. This is a new update on Landlord Studio that allows you to invite your accountant to your organization so that they can have view-only access to your financial reporting.

A Few of Our Reports Include:

  • Profit and Loss (P&L)
  • Income Expense Statement
  • Income Expense by Category
  • Schedule E Report
  • Overdue Rent Payments
  • Reminders
  • Mileage
  • Net Worth Report
  • Occupancy Report
  • Overdue and Upcoming Expenses
  • Payments Made (Lease & Category)
  • Rent Ledger
  • Rent Roll
  • Tenant Directory
  • Plus More+

Exporting Reports to Excel.

On iOS you can export your Profit and Loss report as an Excel file.

To do this:
  • Go to the “Reports” page,
  • Tap on the “Report Type”,
  • Scroll to the bottom,
  • Tap on “Export to Excel”.

Importing Your Excel Report Into QuickBooks.

For detailed instructions on importing excel files into QuickBooks head over to their help page here: QuickBooks Support

Final Notes

Good bookkeeping is the backbone of any business. Whether you choose to use property management software like Landlord Studio or accounting software like QuickBooks or Xero, it’s vital you organize your books properly and keep careful records of income and expenses categorized properly.

The main reasons that this is so important are first that this 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 it’s left as a final massive task right at the end of the year. And finally, if you get audited by the IRS or any other tax body, you will have accurate detailed accounts with all the necessary documents stored and organized ready to show them.

Our software allows you to quickly and easily track rental income and expenses, generate professional reports instantly, reconcile with your bank, and more.

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“Track income and expenses, screen tenants, set automatic reminders, and more with Landlord Studio.”

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Ben Luxon

Ben is an author and real estate enthusiast. His interest in all things entrepreneurial has led him to work with real estate professionals all over the world, distilling their knowledge into articles and Ebooks.

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