A rental property can be either commercial or residential property that is given to the tenant on lease for a fixed period of time. The property given on lease can be for short-term leases like vacation homes or long-term rentals for one to three years.
It is an active type of real estate investment. If you have rental properties in your business and you want to set it up in QuickBooks and also want to track and record the rental income, you can do so by following the below process.
Steps for Setting up rental properties in QuickBooks
For recording rental property income, you need to create a separate company file for rental property, where you would be able to track and manage all the income and expenses.
- At the start, you need to set up properties you are managing as customers, tenants as the job of properties, owners of the property as vendors.
- You also need to set up the accounts and items for the company file for the rental property.
- You will have to record the security deposit as the liability, for this, you will have to first go to the banking menu and click on making deposits. And from the received from the drop-down you need to select the tenant > from the account drop-down > select the security deposit account > enter the amount > save and close.
For tracking the rental income
- First of all, you need to record the rental income for each tenant.
- For this you need to go on customers > receive payments > account drop-down > select account receivable subaccount > from customer: Job drop-down, select the tenant.
- In this step, you need to enter the amount of payment and click on the group with other undeposited funds and click on next.
- You need to repeat the same steps for each rental property.
For making deposits in QuickBooks
- First of all, you need to go to the banking menu > make deposits.
- Now in the payment deposit window/ screen, you need to click on Deposit to drop-down and click on the check box for selecting the sub-account for the property you wish to make a deposit for.
- Now you just need to save the deposit.
You can record property management expenses as bills if you are paying them at the later date and as a check if you are paying them straight away. You can also charge the expenses to the tenants as follows:
- Now from the customer: Job drop-down, choose the tenant you have to charge for the expense.
- Now in the billable column, click on the checkbox and create the invoice or sales receipt and add the billable cost.
In case you need any further information at any point, the QB helpdesk will help you.
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