As landlords, you are all familiar with the revolving door of tenants, the struggle of filling vacancies, and getting an empty unit "rent ready". Aside from that there is exiting tenants and performing the walkout with them; assessing the state of the unit before handling the security deposit.
What does this have to do with bookkeeping?
When you use QuickBooks Desktop to manage your rental business, you are managing the tenants information as well as it pertains to you. Charges for their rent, payments received, any damages charged to them during and after their time with you, and finally the possible return of any part of their security deposit.
I am going to tell you a little about what QuickBooks Desktop can do for you in this area, but not too much 😉
Handling a new tenant, in terms of bookkeeping, is a very quick task. This step you will do after they have been onboarded. I talk about that here. After he or she is onboarded you will enter their information into QuickBooks Desktop as outlined in my post on setting up tenants. The following steps take place after you have your tenants set up in QuickBooks as outlined in my previous post on setting up tenants. You can view that post here.
Once your tenants are setup, you want to create statement charges for their rent and then memorize those transactions. This will save you copious amounts of time as you will only have to click one button and assess those rent charges for all of your tenants. Imagine having to manually enter rent charges for 50 tenants. Memorizing these transactions eliminates that. Awesome right!?
Unfortunately there isn't a memorize option for the receipt of their rent, so this step is manual however, using the setup method described in my earlier post, you can speed this up by simply never leaving the receive payment screen. You will repeat these two steps, entering the memorized transactions and receiving the payments, every month for the duration of the tenant's stay with you.
The fun part comes when it is time to "close" this tenant out on your books and get that unit ready for the next tenant. These steps reference the move-in checklist discussed in another of my posts in onboarding tenants. You can view that post here.
Pull out that move-in checklist and walk through the unit again with the tenant, this time you will be checking things off in the "move-out" side. You want to be sure to take pictures of any damages you see and have the tenant sign off on these. Once you have a handle on the what needs cleaned, repaired, and/or replaced, you can set out to get those things taken care of; ensuring that you keep track of the cost associated with each including any billable time by your contractors for labor.
Inside QuickBooks Desktop, you will enter in the cost for the repairs and replacements against their security deposit. What is left, if any, is what will be returned to the tenant. If there is an amount over what the deposit is, this is what you use to create an invoice and send to the tenant.
Okay, I know it sounds a lot more complicated than your current system but I assure you, it isn't. The steps are almost laid out in their entirety and that seems like a lot. However, this is why AMH is here. I can take care of all of the bookkeeping while you are onboarding new tenants and renewing leases.
I am The Landlord's Bookkeeper™