Go through this article properly for understanding the process for recording transactions of the rental properties for the self-management companies in QB Desktop. In case you are the property manager then you will have to assign the service to the property owners and property tenants as well. Although under such situations you are supposed to create and manage the two company files:
- The rental property company- everything needs to take care of by you including collecting the rent, payment of bills, and management of the whole property on the manager’s behalf.
- The Property Management Company – you will be the owner of the company and you will get the income only for managing the properties.
With the help of these two company files, you will be able to separate the transactions of every company from each other.
Important- for managing the two company files simultaneously you will have to get your QuickBooks updated to the recent version available.
Creating The Company File For The Rental Property Company
With the help of this company file, you will be able to track the transactions of each property that has been managed by you. This company file will have all the records of the rental income and expenses.
Method 1- Setting up of the tenants and the vendors
You will have to first perform the set up of the customers and the vendors in the QB company file.
|Properties managed by you
||Customer: jobs of properties
|Your own property management company
||Your own property management company
Important- The vendors can also be set up as the property owner but they need to be paid the net income for their property.
Method 2- Setting Up Of The Accounts And The Items
Before you perform the recording of the transaction it is important to ensure that the accounts, as well as the service items you are using, have been set up appropriately. You can look at the examples given below:
||Expenses of Property management, payment for the property owner
|Tenant security deposits
||Liability: Security deposits
||Income: rent income
|Fee for the Property management
||Expense: Property management expense
Are You Managing the commercial properties?
If you need to charge the tenants for the Common Area Maintenance Expense also called CAM in short, you will first have to set up income along with the service item. By doing this you will be able to track the CAM income without necessarily tracking the various other fees charged by you.
Method 3- Recording Of The Security Deposits
Generally, the owners of the property need security deposits from their tenants during the starting period of their rent. This is referred to as the rental company’s liability as there are high chances that you will return the whole amount or some part of it once the rent period gets over.
Some of the liability accounts like the security deposit can be utilized for tracking every tenant’s deposit.
- Go to the main menu then select banking and then tap on make deposits
- Now select the tenant in the received from the drop-down menu
- Then tap on the drop-down menu of the ‘from account’ options and select the security deposit account which you have set up.
- Then enter the amount and then tap on save and close.
Method 4- Tracking the rent income
You can record the rent from your tenants by following two ways. The process that you will choose will be depending on the time when the actual rent payment had been received.
- Recording of the rent income from every tenant:
- Select the invoices in case the payment has been received at the later date
- Select the sales receipts in case the payment has been made at the moment.
- Please note that you select the same tenant as well as the item that is set up in the first and the second step.
Method 5- Recording of the expenses for every property
You will have to record your expenses such as property expenses and charges of property management.
These expenses will include all the charges for maintaining the property including the utilities and repairing:
- Record every expense according to the period of when you will be paying to them:
- If it is the bills and the expenses are paid late
- If it is cheques and the expenses are paid at the moment
- Tap on the customer: job drop-down menu and select the property and the tenant.
Fee for the property management
The fee of the property management is highly dependent on the agreement of the property owner. In case the fee is dependent on your gross or the net income of the property then the report of the profit and the loss can be used for calculating the fee.
You can track the property management fee as a bill or as a cheque. Go to the customer job drop-down menu and make sure that you have selected the right property or the tenant.
What is the process for charging the expense to the tenant?
Under circumstances where one of your tenants has damaged your property then the expenses will be charged on the tenant’s account instead of the owner’s account. These costs are called the “billable expenses”.
When you have the requirement for charging the tenant, you can contain all the extra expenses to the invoice of the tenant or its sales receipt.
- The expenses will get recorded in form of a bill or the cheque
- Tap on the customer: job drop-down menu then select the right tenant.a
- Now put a checkmark on the box from the billable column
- You have the option for adding the billable costs every time an invoice or sales receipt is being created.
Method 6- Paying To The Property Owners
After the income and the expenses of every property get recorded, you can verify the due amount for every property owner.
Important- you can make use of the report of profit and loss for checking or calculating the amount which needs to be sent to the account of the property owner.
- First, create a cheque for the payment
- Make sure you have selected the same owner of the property that you had created in the first step.
- Tap on the account column drop-down menu and select the same account of the owner set up in the second step.
- Tap on the profit/loss report for reviewing the net income of all the properties that you have. You will receive the amount of net income in case the property owner has left a net income section. In case you do not get it then ensure that the net income has to be zero.
Creating A Company File For The Property Management Company
By using the company file for property management you can track all the transactions of your business. This is the file that allows you to record income as well as expenses for keeping a track of the properties.
Method 1- setting up of the property owners as the customers
You will have to set up the property owners as customers if they haven’t been set up in the first place.
Method 2- setting up of the accounts and items
You need to set up the accounts as well as service items for recording every transaction easily. You can go through a few of the examples which you can set up:
||Checking account, furniture, and equipment
||Property management income
||Insurance expense, utility expense
||Income: Property management income
||Expense: Utility expense
Method 3- Recording the property management income
You can record the property owners in broadly two ways. The process selected by you will depend on the period from when the payment has been received.
You can record the rent from your tenants in two different processes. The process which you will be choosing depends on the receiving of the actual rent payment.
- Record the rent income from every tenant:
- Select invoices in a situation when the payment has been received at a later date
- Select the sales receipt in a situation when the payment has been made at the moment.
- Please ensure that you have selected the exact tenant and the item set up in the first and the second step.
- Given the amount that has been received from the owners of the property. This amount needs to be the same which you had calculated in the fourth step of creating a company file of the field For Rental Property Company.
Customer Care Service For Quickbooks
With the help of using these methods you will be able to record the transactions for a property management company. This feature is generally used by the QB users but is very profitable for you. Although, while performing these methods and steps there can be situation when you might face any kind of confusion or doubt. Under such situations it is better to get in touch with the technical support experts of QuickBooks for better guidance. You can contact the team of experts at Supportforerror.com or dial the toll-free no. 1800-366-1468 and get your issues resolved immediately.