Landlord Accounting in QuickBooks Step-by-Step Kit

Helen,

When you are managing multiple properties, and using one QuickBooks file, you should create:

• Property Owner as a Customer and Class
• Property as a Job and a Subclass
• Unit as a Job of Property
• Tenant as a Job of Unit

If you are tracking one property in one QuickBooks file - you would only list the Units and their Tenants.

Gita Author of | "ManageProperties with QuickBooks" for | landlords rentals | property managers | NEW - commercial property management

www.expertpublishers.com

Gita,

I just created 2 companies to manage my real estate properties.

1 company is the holding company (landlord) and owns the 3 properties (residential); I will create a new company once I buy the next 3 homes. Basically I only want 3 homes per holding company.

the second comapny is a property managmeent company that is the operations company. The prop manangement company : receives rent payments, pays all biills for repairs/remodels, bills the holding company for all the expenses occured at the end of each month, receives a monthy fee payment for the services rendered. This property management company will manage ALL my properties, from all the holsding companies. It will send out 1099 to the holding company for all expenses paid for..

How would be the best way to set up this in QB ? 1 file for each company or 1 file only for both? what if I create a new holding company for the next 3 homes, should I create a new file ? Also, how / which would be the jobs, classes....

I realize you have a lot of experience in this and hopefully will be of great help for us.You can reply here or e-mail me at ECFinancialGroup@aol.com

Thanks.

Jean-Marc

Hello Jean-Marc,

If you want to 'go with the flow' the most with QB's, then each legal entity goes into a separate QB company file. Years ago this used to be a bit of a hassle, because you had to frequently open and close company files, and only one file could be open at a time. Now though, QB's supports having several company files open at once, so that is easier.

If you want to have one overall company file, you _can_ do that too, but it requires a lot of diligence. Be careful to not have separate entities transactions intermingled. You keep them separate by creating separate accounts for each of them (checking, income, expense, etc).

Of the two options, I'd suggest the first.

Now, your holding company will take the transactions in from the management company. These can be journal entries or deposits to summarize the overall transactions. The property management company is the one you will do  your reporting out of, and it has the most advanced reporting as Gita or I teach in our books. (In that company file you will answer, which unit is most profitable and thus there you will have the customer/job setup as per the recommendation above).

Hope this helps,

Jonathan

"Landlord Accounting in QuickBooks" author, trainer, and ProAdvisor.

Helping thousands of landlords use QuickBooks since 2004.
http://LandlordAccounting.com <-- Free QB + Landlording e-course.  

Thanks Jonathan for the answer.

I definitively had intention of doing this right , so I guess i should create 2 company files : 1 for the holding and 1 for the mamagement. I suppose that if I continue to buy properties, I would have to create a 2nd holding file and so on (since I want to limit the number of properties per company at 3). Correct ?

Now, what version of QB would you suggest ? Pro, Premier ? and which edition (contractor...) ?

Jean-Marc

Jean-Marc, What you described will work, yes. And Pro is generally the edition that works for everyone and isn't unnecessarily more costly. The online edition also works, if you need remote access.

Thanks,

Jonathan

"Landlord Accounting in QuickBooks" author, trainer, and ProAdvisor.

Helping thousands of landlords use QuickBooks since 2004.
http://LandlordAccounting.com <-- Free QB + Landlording e-course.