Step-by-Step: Setting Up QuickBooks for Your Real Estate

Programs like Excel, Numbers, Google Sheets, and OpenOffice can be used to create a basic real estate bookkeeping system to track income and expenses. However, even with one rental property, keeping information updated manually can become tedious and it’s easy to have something fall through the cracks. Proper bookkeeping is essential for success in the fast-paced world of real estate. Integrate your bank and credit card accounts with accounting or property management software.

Real Estate Accounting: The Definitive Guide For 2025

Check in on your records about once a month to make sure anything that’s automated is running smoothly and that your books are reconciled with your bank account. If you’ve got an established business and you’re regularly earning an income as a realtor, consider getting help with your bookkeeping. Having a pro backing you up will make sure you’re keeping everything bookkeeping for real estate agents tidy and not missing out on anything that could save you money. Software cannot yet replace a skilled CPA with expertise in real estate. Find one and utilize it to ensure that you have organized your assets most efficiently. Property managers must track and reconcile security deposits accurately and efficiently to avoid legal issues, maintain good relationships, and protect clients.

Rental Properties

Accurate and well-documented financial records facilitate tax filings, enable proper deductions, and provide the necessary documentation to support your compliance efforts. Money that flows into and out of your real estate business should be categorized and posted to the property account. Rental property financial management software such as Stessa automatically tracks income and expenses and auto-categorizes them for easy reporting. Real estate accounting is an essential part of owning and operating rental property. Real estate agents have a unique set of bookkeeping and financial tracking needs compared to other businesses.

An all-in-one guide to paying federal and state payroll taxes in the U.S.

• Bookkeeping data lays the groundwork for financial planning that looks ahead.
• Tickmark, Inc. and its affiliates do not provide legal, tax or accounting advice.
• They’re just not going to be able to get insights and paint an accurate picture of the financial condition of their company.
• For expenses, the payment will be posted on the date the payment was made, with the name & address of the vendor, amount of payment, payment method, payment period, and balance due, if any.

It’s well worth the read if you’re looking to grow your business and avoid the mistakes many businesses make. Find a bookkeeper or accountant that will update your books on a monthly basis — at a minimum. If you have a bunch of transactions, you may need weekly or bi-weekly reporting. On the surface, running a real estate brokerage doesn’t seem very appealing or profitable. But, when you use contribution margins, you start to see these businesses in a different light. If you’re comparing the profit margin as a percent of revenue of a real estate brokerage, a team, or an individual agent, you are likely to make false assumptions.

Can I use a spreadsheet for real estate accounting?

Income is taxable when payment is received, and expenses are deductible when paid, not when an invoice is received. Landlord Studio is an easy to use property management and accounting software designed for landlords. Find Keep Records for Small Business and screen tenants, collect rent online, track income and expenses, run reports, and more – all for free. Accounting offers real estate professionals a range of tax deductions that can help reduce taxable income. Understanding IRS guidelines is key to maximizing deductions for expenses such as mortgage interest, property taxes, and depreciation.

• Having a pro backing you up will make sure you’re keeping everything tidy and not missing out on anything that could save you money.
• Real estate accounting refers to the monthly and yearly financial tasks a business owner must perform to keep their operations running smoothly.
• Real estate agencies can use real estate accounting software options to manage their accounting deals and real estate deals effectively.
• What’s nice about digital accounting is that it’s much easier to find transaction information than in traditional bookkeeping.
• Ensure a legal professional reviews all contracts and that all financial data is verified before finalizing deals.

Utilize financial management apps and tools

The biggest advantage Quickbooks Online has is the ability to connect your bank accounts, smart-learning to categorize and record expenses, cloud-based solution, and mileage tracking. As a real estate agent or team leader, you juggle many responsibilities—though being a financial expert might not be among them. Yet, grasping the basics of bookkeeping is key to making informed decisions, staying compliant with tax laws, and ultimately, assets = liabilities + equity growing your business.