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Gita_Faust

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03/04/11 6:13am PST
Viewed by asker 04/04/11 9:56am PDT

One file or Multiple files as a Property Manager

Should a Property Management company keep one file for all owners or seperate files for each owner?

There are different view on this forums, as we all have our own system in place. With reading the forums, I have seen two different options for property managers in using QuickBooks for the real estate industry:

Keep one file for all the owner and their properties (I recommend) OR

Keep different files for each owner

Either way you decide, you will have to conside the following questions before making a decision:

How much time you want to spend which relates to money ?

What is your agreement with the owners?

What reports are you going to give the owners?

Do you have someone to check your reports on a monthly basis for accuracy?

and million other questions.... you will come up with

So find a consultant for an hour, ask questions and start on the right foot.

Gita Faust

Advanced Certified QuickBooks ProAdvisor | Enterprise Suite Certified | Point-of-Sale
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2 Replies

Frank876

New Member

04/03/11 3:11pm PDT

Gita,

Great questions, and you seem to be the defacto responder to all questions real estate. I'm still trying to decide how to use QB for a property management company. I'm at a bit of a disadvantage because I still do all my reporting by hand and quickbooks' graphical interface can be counter-intuitive sometimes.

Consider this scenerio:

Property management company "Kim's Prop Managment Inc" manages a property at 123 Main Street, Tampa, FL for their client "Joe Smith" for a 10% management fee. So here's how my journal entries would look in my old school green ledger:

Step 1 - Payment from Tenant to Kim's Prop Management Inc:

Cash 1000

Property Management Income (Income Acct) 100

Rent Due to Owner (a liability account) 900

Step 2: Payment to Joe Smith

Rent Due to Owner 900

Cash 900

So to me, this makes perfect sense because Kim's Prop Managment Income statement will not show the full $1000 as rent income - just the $100.00 as her property management fee.

However, in order to create sales receipts, QB requires you to point rents received into an income account. Therefore, the entry would look like this:

Step 1: Receive rents from tenant:

Cash 1000

Rents Received (an income/revenues acct) 900

Property Management Income 100

Step 2: Remit payment to Joe Smith and withhold fee

Remit to Joe Smith (Expense Acct) 900

Cash 900

Now, GAAP suggests that even pass through rental income may be stated as revenue on the company's income statement, but I can't find the exact codification on this.

Do you know what the standard is here?

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Gita_Faust

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04/04/11 9:55am PDT