Tracking income and expenses for rental property is a task most landlords do not enjoy. This record keeping task is time consuming and, to be frank, often mind-numbingly boring. Nevertheless, maintaining good accounting records makes tax time easier, is important to understanding how your landlord business is doing, and provides peace of mind.
Landlords can select from a variety of ways to record income and expenses. Cost, ease-of-use, and features (like reports) are items to consider when deciding on which rental property accounting method to pursue. We’ll take a look at some common ways, from the simplest to the most complicated, for tracking rental property income and expenses.
|Tracking Method||Pros & Cons|
* Create your own with Google Docs or Microsoft Excel
* Download free rental income and expense worksheet
*Cannot easily generate reports
|Free Accounting Software||* Free|
* Simple and intuitive
* Easily generate reports like a Schedule E Helper and Profit & Loss statement
|Paid Accounting Software||* Expensive|
* Can be overkill for a small landlord
* Complex and challenging to understand
* QuickBooks, Buildium, RentecDirect
|Landlord Services||* Provides benefits in addition to record keeping such as online rent payments, tenant screening, credit reporting, and vacancy listings|
* Many times income and expense tracking is included as a free feature
* ClearNow, Zillow Rental Manager
While tracking rental income and expenses is not the most desirable task, finding the solution that best fits the budget, is easy to use, and provides features like reports becomes important to make tax time easier and provide peace of mind. From simple spreadsheets to free accounting software to paid accounting software to general landlord services, fortunately landlords have a choice when it comes to finding the right rental property accounting software for their needs.