Property Management
Do you enter incoming rent from the tenant that is due to the owner as a liability? Is the management fee portion of that rent then entered as "Income" for the company?
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07/10/11 3:12pm PDT
Viewed by asker 08/03/11 8:22am PDT
Viewed by asker 08/03/11 8:22am PDT
9 Replies
Rolaine
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07/10/11 3:53pm PDT
yes.
I'm assuming that you don't necessarily want the tenant to know how much the owner is receiving, so you don't want to isolate this out on your rental invoices. The invoice would be made for the total amount of rent due. The receive customer payments data entry screen would be for the amount of money that you received. The most logical place to show the percentage earned by the company is in the make deposits data entry form.
Instead of making a separate general journal entry, just add an extra two lines to the detail section of the deposit - pull it out of revenues and put it into a liability account for the amounts that you will forward to the owner. It makes it so much easier to find the funds earned general journal transactions again if you group them together with the deposit that they belong to, on the same data entry form where you make the deposit.
07/10/11 3:56pm PDT
Best Answer - Chosen by the Community
detail section of the make deposits form - list all customer rental payments first
add two extra lines, put the amount coded to the revenues account as a negative number and the amount coded to the liability account owed to the owner as a positive number.
07/12/11 5:16pm PDT
I may be missing something here, but if you do that, the deposit amount is wrong. Example: Check received $1000.00 (amount to be deposited). If you add a line to code $100.00 to the revenue account (-100.00) and add a line to code $900.00 to the liability account (+900.00) then the deposit total at the bottom comes to $1900.00. What am I missing in your answer?
07/10/11 7:41pm PDT
Thank you for that detailed respnse. That sounds very workable! I appreciate your help.
lynda
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07/12/11 5:34pm PDT
This blog post should help you.
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Lynda Artesani
Artesani Bookkeeping
www.artesanibookkeeping.com
Lynda Artesani
Artesani Bookkeeping
www.artesanibookkeeping.com
07/12/11 6:25pm PDT
Lynda, I appreciate your reply, but my question pertains to my new Property Management company that manages properties for other people. I have used QB for my own bookkeeping for rental properties that my husband and I have owned for many years and I have everything set up to work for us personally. I can't figure out a trail for invoicing and showing the rent received from the tenant as a liability for the portion to be distributed to the owner and the portion to keep as the management commission for my company. I also need to know how to set it up so that the owner of the property can receive a 1099 at the end of the year for gross rents received. I am setting the Owner up as a Customer, the property (tenant) as the Job, and using the "class' feature. Can you offer some help on the trail I have described above?
07/13/11 4:20am PDT
If you are managing properties for others, the property owner is the customer and their tenants the jobs under the customer. You can run a P&L by job report to see how much $ received and how much expenses paid out, if applicable.
Then the property owner is also a vendor when you pay them their cut of the rental income. You send the vendor the 1099. You don't need to use classes for this type of tracking at all.
07/13/11 5:53am PDT
Ok, Lynda, stay with me here, please. 1) When you invoice the tenant for the full amount of rent due, do you make the item for rent due as coming into a liabiity account or an income account? (90% of it is a liability to my company and 10% is a management commission income to my company).
07/13/11 6:28am PDT
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You create monthly invoices for the tenant's & receive the payments (unless they pay you annually, then I would post to a prepaid rent acct and use discounts to apply them monthly).
Then run a P&L by Customer/Job report for a date range and take the total rental income and calculate to pay the landlord 90%, thus removing the 90% of the rental income from your company's rental income acct. Pay the landlord using the same rental income acct. Make rental income acct the 1099 acct.
At the end of the year, the only income you will show is the 10% collected. If you use a liability acct. for your rents, you will not be able to show the total income on the P&L by job report.
Here is a link from the "Ask Intuit" website for property management. There are other hot links that should help you.
