Record rent paid to a Property Manager

The easiest way I've found is to just receive the payment of rent as you normally would and apply that payment to the open rent invoice for that tenant. 

Then just write the owner of the property a check without a sum in the amount field.

In the first Item field (not under the Expense Tab) use whatever Item you have set up to show that the rent was received and the amount.  On the next line down add an Item for your Management Fee but show that as a negative amount, because you are deducting your Fee from the owner's proceeds.

The check to the owner will have filled in the the proceeds they will receive for the month. (Rent received minus the Management Fee) Then just hit print and mail it off.

You can also record expenses you may have paid for out-of-pocket by listing those Items as negative amounts.

QB will automatically adjust the amount of the check as long as you didn't initially pre-fill the amount.

Property:tenant or Property:unit:tenant is Customer:job.

Owners are Class. Open Help and read about class tracking.

If you want to use Owner:Property:unit:Tenant, for Customer:job:subjob, etc, you can do this, too.

Don't have Owner names as Customer because when you pay them, they are Vendor names.

You run reports such as P&L by Class and Job reports, to see the activities.

You record everything in separate steps and in full. You record Rent due from tenant using Items, use Invoice (no one said you have to print and send an invoice, use it to track due dates by tenant). You pay vendors in full, gross, and then use a negative for your own holdback, linking that to your income account for commissions. The check to the Owner as vendor name is Net but you have captured the full rent out to them for 1099 reporting.

You use items to track security deposits, too. Use Sales Receipt to receive it, Credit memo to return it.

Property owners won't receive an invoice from you, typically, because these are people you pay. Vendors, not customer.

Setup two company files.  One for your PM Company and one for your Owners.

Bill your Owners for your commission from your own PM Company File. That bill is now a bill that needs to be entered into the Owners Company file, just like any other bill. 

Write a check to you for the bill you sent them from their company file because it's an expense.

Running a Profit and Loss Report  will show how much money your owners made less expenses.

To send your owner their bottom line, write a check to them using "Rent Due to Owner" that you setup in their Chart of Account as an expense account. (If they have money coming to them and their bottom line is a profit)

If it's a negative, Invoice the Owner for the amount that is due to cover the negative amount.

The simpler you make QuickBooks the better it is.  Don't try cramming everything into one company file. 

Nancy Neville, Certified QuickBooks Pro Advisor, Landlord Consultant

Author of:  Property Management in QuickBooks

Author of The Landlord's Guide to QuickBooks

Author of How to be a winner for Landlords

http://www.nancyneville.homestead.com

Gelham, you can't credit customer names for Rent you owe to them, as customer names. Because this is not documenting Rent owed and "paid" to Vendor names. Well, you can do this as long as you don't expect the data in QB to be useful for 1099 purposes. You can't report what you don't track.

You can read Help system on how to track "when customer is vendor, too" using a Barter Bank-type of account. You need to track activity to the appropriate name type, for accurate reporting.

Or, as Nancy points out, keep two data files.

You can't use Credit memo and Invoice for Owners as Vendor Names. This isn't going to track what you owe and pay them.

Invoice for rent.

Create Bill to Owner as vendor name, for what you owe them.

On the bill, use a negative for what they owe you: repairs, fees.

Pay them the Net.

 GREETINGS,

Don't know if you still are looking but this is how I have set up my sysyem for the same situation:

1) I created a "other current liability" account giving it the name "property funds owned by..."

2) The tenants in the builbing are normal customers AND I have also made the property owners a normal customer. 

3) When I set up the "items" for the rental rates, utilities, etc.., and charge them to the tenants each of these are recorded, not as a "sale" but under the "other liability account". After all, my company is not selling to the tenent but actually...selling.... management services to the property owner. 

Here - under my items I have a "property management service fee". This is what I charge to the property owner when I create an invoice to charge him. 

4) when the rent is paid into the actual bank account  (which my company owns) it covers the tenent invoice and increases the liability owed to the property owner. 

5) I then invoice the property owner for management services and any other expenses for that month and inform the owner that the invoice balance will be deducted form the bank account

(note) I open an actual bank account for each property under my control.

6) To pay myself for the services - we simply make a journal entry, debit- other liability and credit - accounts receivable marked to the property owner. Then I can transfer the funds from that account to my main operating account (recorded by general journal entry)

7) to transfer the rest of the rent to the owner of the property, I write a check from the management account for the required transfer paying the owner. Then to record this I debit - other liability and predit accounts payable (i.e. to record the "expense")

In general, I treat this like a "trust fund" on my company books and can keep my company expenses and income seperate from the rental income which is in essence belongs to the property owner - it is only entrusted to be under my control. For my accounts this is a, you guessed it ..... liability. The rent only flows through my account.

Might not be the perfect solution but does offer transparency. Hope it helps.