Rental property chart of accounts free template & resources

Equity categories should reveal your ownership position and track how profits are reinvested or distributed. And, learn why other commercial real estate owners use STRATAFOLIO to increase efficiency and profitability. By consolidating your chart of accounts into STRATAFOLIO, you create an effective, scalable accounting structure that drives better decisions and sustainable growth. Even seasoned real estate professionals can make setup mistakes that cause confusion or inaccurate reporting.

Lease Compliance Services for Property Managers: Ensuring Financial Accuracy and Regulatory Adherence

This means having a strong system in place to collect, analyze, and report on all of your business activities. Before we begin importing our sample chart of accounts for a real estate company, we need to clean out the chart of accounts that QuickBooks Online provides. Other times, investors will take advantage of a 0% or low interest rate promotion to make property purchases, then pay off the balance due when the credit card interest rate rises. The rental property balance sheet from Stessa can sync with an investor’s mortgage account, allowing the outstanding mortgage balance on a rental property to be updated in real time. By having expenses detailed on the chart of accounts, investors may be able to gain keener insights on ways to reduce operating expenses and increase cash flow.

Common Mistakes When Setting Up a Chart of Accounts

Tracking your rental income is key to knowing how your properties are really doing. These accounts are your go-to for tracking what you owe at any time, giving you a snapshot of your financial scene (Stessa). On the other hand, non-reimbursable expenses are costs that the owner must handle directly. Expenses like maintenance can also be capped at a certain amount, meaning that any further costs in that category become non-reimbursable.

Step 2: Assign Child Category Codes

We will also handle all of your bookkeeping and payroll tasks, including reconciling bank accounts, preparing financial statements, and processing payroll. The rental property balance sheet from Stessa also automatically updates property market values and outstanding mortgage balances. Viewing information in real-time provides investors with a more accurate idea of owner’s equity and the current loan-to-value (LTV) of every rental property in the real estate portfolio. A rental property chart of accounts provides the groundwork for keeping track of every financial record related to real estate bookkeeping a rental property.

NAR produces and analyzes a wide range of real estate data that can help guide your business and your clients.

One of these expense types that need to be tracked and managed are operating expenses, commonly referred to as Common Area Maintenance (CAM). Accumulated depreciation is another common account, and it’s designed to track the depreciation of your assets over time. Specifically, the original value of those assets, the accumulated depreciation, and the net asset value via the balance sheet. Rental income goes in the income section of your chart of accounts.

Real Estate Chart of Accounts

• This is a much easier process than changing all of the accounts in the auto setup.
• This clarity translates to more accurate financial reporting, which is crucial for both internal analysis and external reporting requirements.
• Creating a well-structured chart of accounts for rental property begins with defining categories that reflect the full financial lifecycle of each property.
• Find Community Reinvestment Act (CRA), enforcement, and institution data for OCC-regulated banks, federal savings associations, and federal banks and agencies.
• This could mean expanding your accounts in certain areas so you have clarity on some expenses.
• While every landlord’s setup may differ, consistency and clarity are non-negotiable.
• This way, you can track finances by property within your chart of accounts without making the whole chart too long to manage.

They are crucial for understanding the value of the business and its financial stability. Equity accounts also play a significant role in determining the distribution of profits. As a real estate investor with multiple properties, you need to track your investments’ performance from a single unit to the portfolio as a whole. Start by separating income, expense, asset, liability, and equity accounts. Use consistent naming conventions and numerical ranges to keep the chart logical and easy to expand as your portfolio grows. Regularly review and update your account structure to remove obsolete accounts and ensure you cover all necessary categories.

Setting up a chart of accounts tailored to your real estate management company is a foundational step in establishing a robust accounting system. This chart should be structured to capture all financial transactions specific to the real estate industry. It’s not just about listing accounts; it’s about organizing them in a way that makes financial analysis straightforward and intuitive. Liability accounts in real estate capture all the debts and obligations owed by the property management company.

Essential Components of a Real Estate Chart of Accounts

This clarity is central to effective property management accounting. By keeping revenue categories distinct, you make tax preparation more straightforward and improve your ability to spot under- or overperforming assets. Adopting these methods also aligns your records with industry standards for real estate financial reporting. Thank you for sticking with us through the process of setting up a chart of accounts for a real estate company using QuickBooks Online.