The Best Alternative to Spreadsheets for Rental Property Accounting

Spreadsheets have had a profound impact on the world, transforming traditional pen and paper processes into highly efficient systems. It's fair to say that they have revolutionized the way businesses operate. Nevertheless, they're not without flaws, often plagued by errors. Consequently, in the three decades since their inception, various industry-specific solutions have emerged to tackle the limitations of spreadsheets.

For individuals seeking improved methods to handle their rental property accounting, grappling with spreadsheet errors and desiring to minimize administrative burdens, there is encouraging news. There are now numerous of industry specific real estate accounting solutions that can help. Enter Landlord Studio.

Landlord Studio offers a range of streamlined income and expense tracking tools alongside powerful automation and reporting designed to help you take your rental property accounting to the next level.

The Shortcomings Of Spreadsheets For Rental Properties

1. Spreadsheets contain errors

The very first shortcoming is that the majority of spreadsheets have errors. In fact, in a study, it was found that as many as 88% of spreadsheets have errors. Many of these are simple typos. However, many are mathematical errors or errors in formulas. Even a misplaced decimal could have devastating effects. JP Morgan’s so-called “London whale” fiasco, for example, involved a single spreadsheet error and led to a $6 billion loss for the company.

2. They are inefficient

When we talk about efficiency we are talking about the minimum input necessary to achieve the required output. To keep a detailed spreadsheet up to date and free of errors is a time-consuming task and as we mentioned above, one seemingly small error could throw all of that hard work out the window in an instant.

The inefficiencies of using a spreadsheet for rental property income and expense tracking isn’t so bad when you have one or two properties, however, as your portfolio grows so too does the complexity and associated time required to manage and track your investment finances. And, so too does the likelihood of costly errors.

A spreadsheet doesn’t scale with you, it gets larger and more unwieldy as your business and financial complexity grows.

3. They only do one thing

Spreadsheets are designed for one thing and while they do that one thing well, as a landlord or property manager, you have more needs than just income and expense tracking.

By pairing accounting tools with property management tools in a landlord specific solution you can dramatically increase the efficiency of multiple areas of your rental business.

This means, instead of inexorably being overwhelmed by the growing number and complexity of spreadsheets, you can instead scale your portfolio with increasing efficiency.

Save time and maximize deductions while simultaneously improving the management of your properties.

Still want to use a spreadsheet? At least use a good one. Download our free rental property spreadsheet template here →

Reasons To Upgrade To Landlord Studio From Spreadsheets

While spreadsheet used to be the only way to manage your rental property accounts for free that's not the case anymore.

With Landlord Studio GO your first 3 units are completely free. After that Landlord Studio PRO remains highly affordable with pricing that scales with you starting at $12 per month.

‍View pricing →

1. Accounting designed for landlords

Landlord Studio has a number of features designed to reduce the chance of errors in your rental property accounting. For example, connect your bank account to view and reconcile income and expenses. This not only saves you time but removes the need for manual data entry.

Secondly, our smart scan receipt feature allows you to scan your receipt with your phone, the system reads and inputs the details for you and stores a digital copy with the expense.

Finally, our online rent collection feature allows you to automate the entirety of the rent collection and income tracking process, removing any potential for incorrectly tracking rent payments.

It takes a few minutes to get set up and has a mobile app so you can manage your income and expenses on the go and in real time. Meaning no more missed deductibles. Plus, your first 3 properties are completely free.

2. Combine property management features with basic accounting

• Tenant screening: Run tenant screening reports through the software as an efficient way to screen your tenants.

• Rent collection: Collect rent through Landlord Studio and the system will automatically recognize and reconcile the transaction for you. This makes it easier for tenants to pay their rent, reducing the chance of late or missed payments with our auto-pay feature, and improves the accuracy of income tracking.

• Document storage: Store all the important documents related to your properties and lease in the system and have access for reference purposes at any time from any device.

• Automation: Automate your rent collection and income tracking as well as regular tenant communications like rent reminders and receipts.

• And more…

Conclusion

Ultimately the solution that you choose needs to fit your needs. There is a reason spreadsheets have been used for years, they are adaptable and generally great for general finance tracking.

However, when it comes to tracking income and expenses for properties they can very quickly get out of hand. Each property needs to be tracked like an individual business which means if you have 20 units you’ll need at least 20 individual spreadsheets for each of your rental properties, and a new one each tax year. This means you can't easily review your finances, and are likely to miss deductible expenses, leading to overpaid taxes and reduced cash flow.

Alternatively, find a solution that is designed to make managing your properties and income and expenses as easy as possible - a free and easy to use solution like Landlord Studio.