Hello, this is really a best video setting up and recording books for real estate property managers. I will use all the tips and tricks you taught. thank you so much.
THANK YOU for the wonderful tutorial!!! This is so down-to-earth, fast, and INFORMATIONAL video! I am setting up a landlord quickbooks online account... This is like a bible. THANKS!
Ur amazing mentor and a lots of important information gather from u sir.may Allah always bless u sir.keep watching ur videos and enhance my knowledge.thanks for sharing knowledge,it's blessing.
I’m a bookkeeper who has PM client. I set her up w Bal Sheet method but she’s frustrated at the lack of reporting,saying that her PM software can do all that out of the gate. Now that I have a year’s worth of transactions in QBO for 15 properties, is there an effective method to switch over to PL method? And what are the drawbacks to this PL method? For example, how could she quickly know what her true bank balance is for her property customers? She DOES hold money on their behalf and doesn’t clear it at end of month. She has only one Trust bank ( not split to each property), so per Bal Sh method, I created a liability per property (which seems to give us a running balance per property. Would be crucial for her to know that $. Looking forward to your input esp about converting from BS to PL method
Through profit and loss approach, if let say owner contributed 10,000 dollars as deposits in month of January and there is no income and expenses in Jan and February how we can see funds held are still at 10,000 Dollars in Feb?
Why do you only use “client Money” rather than each individual clients money? In my opinion, I think it would be more helpful to have a bank account for each customer and then a liability account for each customer. Feels more intuitive… but you’re the expert, so i defer to you.
@@HectorGarciaCPA I am getting very tripped up between your way of doing things and @thequickbooksdude way of doing property management bookkeeping. You guys do it very very different. But your way is much quicker.
Hi Hector! Thank you for coming up with such a very informative and useful video on Property Management Accounting. I have questions. What entry will you pass pertaining the refund of Security Deposit once the Rent Agreement is terminated. Also, is it alright for an Expense account to have a positive Balance, just like the case of Security Deposit? Moreover, under the P&L Method, you failed to illustrate the charging of the Property Management Company of Management Fee for us to see how it would reflect on the Balance Sheet and Income Statement of the Property Management Company.
Hey Hector, thanks for this, I'm new to property management accounting via QuickBooks and wondering how would you enter funds received by the property owner, as it isn't rent?
Hi Hector, as a property manager, the property owners are customers, tenants are not customers, you should not invoice tenants. am i right? What I do is to use general journal to record the rent received from tenants and apply to invoice to property owner, then write a cheque to property owners.
Well depends on the role.. you invoice the tenants to colllect the rent in behalf of your clients and you invoice customers their fee.. please watch the video; is explained there
Hector, thank you for this video! Couldn't you also accomplish the separation of the properties vs. the property management business using the "Business/Location/Branch" tracking feature in QBO? Using Businesses in combination with Classes for each property seems to provide the ability to have separate P&L and balance sheet.
The first approach. The balance sheet approach. I understood and made sense. The second approach. The profit and loss approach. I found very confusing and it didn't make much sense to me.
Hi, I am hoping to use this p&l technique for a property management that is for Nightly Vacation Rental properties, any reason it wouldn't work? The only issue still is that in Plus you can only have 40 classes, can you use Projects? or have you figured out another way to get this to do this work around? Also if the property management company is paying the sales taxes, wouldn't you just put that as a other current liability?
Hector, this was a great walk through and exactly what I was looking for after watching many videos that didn't really help with my questions! I am not an accountant, just a real estate broker taking on some property management. I'm opting for the balance sheet method, but my only concern is being able to generate a 1099. Since a customer profile doesn't give an option for tracking for 1099 purposes, what is the best way to handle that? Thank you for your time! :)
Great video Hector. I'm new to QuickBooks & find your videos extremely helpful. I've subscribed & will continue to watch & recommend you. I do have a question. If the property owners are customers, is there a special way to 1099 them in Quickbooks? (I'm thinking vendors are usually associated w 1099's)
Hi Hector, should the contractors paid throught the escroll account (using the balance sheet method) receive the 1099-nec from the property management? I’m confused, because if so, this “expense” will be used as COGS in the company’s tax return, correct? How about in the P&L method? Does it work the same way?
I'm not sure if the software has changed - my fields in entering expenses are slightly different than shown. As long as I put the Customer in the Payee and not the contractor I paid, then it will pull it in by customer in my transaction ledger, but if I put the contractor and put the customer in the line detail, it will NOT pull it into the transaction ledger. I'm sure I'm doing something wrong, but for the life of me, I can't figure it out. This will not work for me because there is no way to split a transaction, so for lawn care, when I pay for all properties with one check. Any ideas what I'm doing wrong?
Hi Hector: question, If one rent collected has been returned or reversed because sufficient fund to cover value of transaction when tenant Pay the rent how can I enter this transaccion? can you help me with that?
@HECTOR Another question is whether the repair expenses we make for clients (investors) such as pool cleaning or maintenance have a profit margin. How can I do it and see this on the profit and loss statement?
Maybe do an episode on Real Estate development. Basically, construction of property that is owned by the company your in, and planning to keep after construction is completed, and the implementation for getting everything set up inside the buildings for daily operations.
Good video. Prefer the Balance Sheet method. However, how do you deal with invoicing tenants, where they haven't paid all of the prior month rent? For example, same property owner with two tenants in two properties, both $1000/mo rent. The tenants both pay $500, leaving a $500 balance due each. The next month, both are invoiced $1000, so they each have balance due of $1500. I paid the property owner the $1000 collected from the two tenants (let's ignore fees for now). Now the CLIENT MONEY account will show $3000 ($1500 each), which is out of balance from the Escrow Bank account, since those monies haven't been paid. So technically, I don't 'owe' the property owner $3000 as that money was never collected. Does one just accept they will be out of balance, if tenants owe back rent?
@@HectorGarciaCPA Thanks for the quick response. I found something else disturbing. When I invoice the tenant, using the RENT service, an entry is made in both Accounts Receivable and CLIENT MONEY. So far so good (I wish QB online would handle multiple A/Rs). However, when the tenant makes a payment and I post it to the invoice with funds going to the CLIENT MONEY Bank Trust account, only one entry is made against A/R. The transaction in CLIENT MONEY is orphaned. Is a journal entry required? I'm losing faith in Quickbooks and Intuit in general.
@@SCFoster quickbooks is an accounting software, not a property management software. Everything QB is doing is by design, And correct. What ever you are doing and/or find disturbing is because of your lack of understanding of how the software was designed, but is OK because all accounting software has the same design. If you go with Xero or Sage... will get the same result
@@HectorGarciaCPA Not sure you meant the tone, so I'll give you the benefit of the doubt. I'm well aware of the ins and outs of software design, having many software patents under my belt. What you describe is not 'by design' but a limitation of the software. Intuit can choose to expand the functionality or not. It's their company and yes development dollars are not unlimited. Thanks for the responses. They confirmed my observations.
@@SCFoster there was no “tone” I just reassuring you that the software is OK and working as designed. What you might need is to change your process/approach to get the desired outcome
Hi, I would like to ask about managing the client's tenants? Is there a way to include this in the Profit and Loss approach? Can locations be used to track tenants unpaid rent?
Hector, good video. For the second method, you use classes. However, Intuit has now limited classes to 40 for QB online Plus. One has to 'upgrade' to QB Online Pro for unlimited classes. The pricing is ridiculous at that level. So, do you still recommend using that approach, given the excessive cost?
Scott Foster when we made this video, the limited classes was not something we had foreseen. So if you got more than 40, you need to pay $150 a months unfortunately; The only unlimited dimension we have under Plus is customers.
@@HectorGarciaCPA Hector, thanks for the quick response. One thing I'm exploring is Projects. Those are unlimited as far as I can tell, so that may provide the differentiation that classes would provide. Have you used Projects?
Hi i have Quickbook and I want to enter bill for our subcontractors once I create item for his retention how should I linked thus item in expense accounts and income account
Hello. Thank you so much for the video. It's been truly helpful. I have a question, when I put record expense, it doesn't appear the customer line and I can't select it. What should I do?
Infinity Investment Inc Inc part two will come in a few months.. maybe October/November. A private class is $425 with my partner Alex who is an expert on real estate. Email me Hector@garciacpa.com and I’ll connect you
Hello, this is really a best video setting up and recording books for real estate property managers. I will use all the tips and tricks you taught. thank you so much.
Great
Thanks for your video! Love QB! My PMS, DoorLoop integrates with them and I'm so happy.
Great to hear!
THANK YOU for the wonderful tutorial!!! This is so down-to-earth, fast, and INFORMATIONAL video! I am setting up a landlord quickbooks online account... This is like a bible. THANKS!
Awesome!
Ur amazing mentor and a lots of important information gather from u sir.may Allah always bless u sir.keep watching ur videos and enhance my knowledge.thanks for sharing knowledge,it's blessing.
:)
I’m a bookkeeper who has PM client. I set her up w Bal Sheet method but she’s frustrated at the lack of reporting,saying that her PM software can do all that out of the gate. Now that I have a year’s worth of transactions in QBO for 15 properties, is there an effective method to switch over to PL method? And what are the drawbacks to this PL method? For example, how could she quickly know what her true bank balance is for her property customers? She DOES hold money on their behalf and doesn’t clear it at end of month. She has only one Trust bank ( not split to each property), so per Bal Sh method, I created a liability per property (which seems to give us a running balance per property. Would be crucial for her to know that $. Looking forward to your input esp about converting from BS to PL method
You have to use the BS METHOD
I use DoorLoop's integration with QB, love it! This was so helpful
Great, thanks
I wished I had watched this months ago! Thanks Hector, can always count on you!
Through profit and loss approach, if let say owner contributed 10,000 dollars as deposits in month of January and there is no income and expenses in Jan and February how we can see funds held are still at 10,000 Dollars in Feb?
Why do you only use “client Money” rather than each individual clients money?
In my opinion, I think it would be more helpful to have a bank account for each customer and then a liability account for each customer.
Feels more intuitive… but you’re the expert, so i defer to you.
I have done this is different ways. Your idea could work too. I am just showing one use case
@@HectorGarciaCPA I am getting very tripped up between your way of doing things and @thequickbooksdude way of doing property management bookkeeping. You guys do it very very different. But your way is much quicker.
Hi Hector! Thank you for coming up with such a very informative and useful video on Property Management Accounting. I have questions. What entry will you pass pertaining the refund of Security Deposit once the Rent Agreement is terminated. Also, is it alright for an Expense account to have a positive Balance, just like the case of Security Deposit? Moreover, under the P&L Method, you failed to illustrate the charging of the Property Management Company of Management Fee for us to see how it would reflect on the Balance Sheet and Income Statement of the Property Management Company.
If we use classes for everything, why wouldn’t we be able to use class for reports instead of using other income/expenses?
Yea, the P&L by Class
Hi Hector, how you go about doing a rental property bookkeeping cleanup? Any information would be appreciated.
Thanks in advance!
I dont have anything specific to that, would require looking at the file
I think "Client Money" should be listed as "Trust Accounts - Liabilities"?
I agree
Hey Hector, thanks for this, I'm new to property management accounting via QuickBooks and wondering how would you enter funds received by the property owner, as it isn't rent?
It’s “Owner Contribution”
Hi Hector, as a property manager, the property owners are customers, tenants are not customers, you should not invoice tenants. am i right?
What I do is to use general journal to record the rent received from tenants and apply to invoice to property owner, then write a cheque to property owners.
Well depends on the role.. you invoice the tenants to colllect the rent in behalf of your clients and you invoice customers their fee.. please watch the video; is explained there
Thanks for this video! Is this what is called trust accounting for property managers?
Why did you add security deposit as a subaccount of balance related expense? How security deposit can be an expense?
Hector, thank you for this video! Couldn't you also accomplish the separation of the properties vs. the property management business using the "Business/Location/Branch" tracking feature in QBO? Using Businesses in combination with Classes for each property seems to provide the ability to have separate P&L and balance sheet.
The problem is you can’t split expenses wirh Locations
The first approach. The balance sheet approach. I understood and made sense. The second approach. The profit and loss approach. I found very confusing and it didn't make much sense to me.
P&L approach is to accountant-friendly, if you are an accountant is supposed to make no sense.
DO you have any videos sharing your best tips for setting up AirBnb rentals / as property managers?
Alicia Day not on AirBrb specifically.
This works fine for a couple properties or tenants but what happens when there are 120 tenants.
Should just work the same
great video, why you do not have a mentorship or coaching program?
How does the owner write off those expenses using money from the escrow account if they aren’t made using the customers business account?
Hi, I am hoping to use this p&l technique for a property management that is for Nightly Vacation Rental properties, any reason it wouldn't work? The only issue still is that in Plus you can only have 40 classes, can you use Projects? or have you figured out another way to get this to do this work around? Also if the property management company is paying the sales taxes, wouldn't you just put that as a other current liability?
Hey Hector, what accounting title should be used in a renovation of property? How it should be setted up in the chart of accounts?
that would be part of repair and maintenance -other expenses
Hector, this was a great walk through and exactly what I was looking for after watching many videos that didn't really help with my questions! I am not an accountant, just a real estate broker taking on some property management. I'm opting for the balance sheet method, but my only concern is being able to generate a 1099. Since a customer profile doesn't give an option for tracking for 1099 purposes, what is the best way to handle that? Thank you for your time! :)
,,
Did he answer to you?
Hi Hector, How would I record a check received a month after deposit amounts have been recorded in quickbooks
Great video Hector. I'm new to QuickBooks & find your videos extremely helpful. I've subscribed & will continue to watch & recommend you. I do have a question. If the property owners are customers, is there a special way to 1099 them in Quickbooks? (I'm thinking vendors are usually associated w 1099's)
You 1099 then outside QB
How do I create the property management client in the Quickbooks online version?
Did you watch the video?
Can I buy QBO with classes from you. And, can you set up my QBO for my property management company?
Thats QBO Plus for $85/month
Hi Hector, should the contractors paid throught the escroll account (using the balance sheet method) receive the 1099-nec from the property management? I’m confused, because if so, this “expense” will be used as COGS in the company’s tax return, correct?
How about in the P&L method? Does it work the same way?
Hey Hector!
Do you have any recordings how buildium/appfolio work with property management bookkeeping?
I dont
I'm not sure if the software has changed - my fields in entering expenses are slightly different than shown. As long as I put the Customer in the Payee and not the contractor I paid, then it will pull it in by customer in my transaction ledger, but if I put the contractor and put the customer in the line detail, it will NOT pull it into the transaction ledger. I'm sure I'm doing something wrong, but for the life of me, I can't figure it out. This will not work for me because there is no way to split a transaction, so for lawn care, when I pay for all properties with one check. Any ideas what I'm doing wrong?
Yea they have updated, but the mechanics should be the same
What is the difference between Quick books and a Property management software? ( I use Buildium.com)
I owe a lot to you Sir! Very helpful videos ;)
This is great Hector. have you done another video or another part regarding managing Real estate?
There is one I did with Seth David as well
Hi Hector: question, If one rent collected has been returned or reversed because sufficient fund to cover value of transaction when tenant Pay the rent how can I enter this transaccion? can you help me with that?
@HECTOR Another question is whether the repair expenses we make for clients (investors) such as pool cleaning or maintenance have a profit margin. How can I do it and see this on the profit and loss statement?
Reverse the income Account
The margin or profit goes into the property manager’s P&L but not the investor’s P&L
what happens if you get reimbursed?
should reverse the balance in the account
Maybe do an episode on Real Estate development. Basically, construction of property that is owned by the company your in, and planning to keep after construction is completed, and the implementation for getting everything set up inside the buildings for daily operations.
allfruit that’s coming
@@HectorGarciaCPA Did you do one already? This is an awesome video. You make the best tutorials and so quickly.
Maureen Aquino yes.. but it wasn’t published into RUclips, it was part of my paid webinars program.
Can you Run a property management without the Plus? Can I get away with just the baisc? I manage 2 property’s. Great Video
It’s hard without Classes/Locations
So simple start is for Landlords only?
Good video. Prefer the Balance Sheet method. However, how do you deal with invoicing tenants, where they haven't paid all of the prior month rent? For example, same property owner with two tenants in two properties, both $1000/mo rent. The tenants both pay $500, leaving a $500 balance due each. The next month, both are invoiced $1000, so they each have balance due of $1500. I paid the property owner the $1000 collected from the two tenants (let's ignore fees for now). Now the CLIENT MONEY account will show $3000 ($1500 each), which is out of balance from the Escrow Bank account, since those monies haven't been paid. So technically, I don't 'owe' the property owner $3000 as that money was never collected.
Does one just accept they will be out of balance, if tenants owe back rent?
Right.. client money will be off in cash basis if the payment is not made
@@HectorGarciaCPA Thanks for the quick response. I found something else disturbing. When I invoice the tenant, using the RENT service, an entry is made in both Accounts Receivable and CLIENT MONEY. So far so good (I wish QB online would handle multiple A/Rs). However, when the tenant makes a payment and I post it to the invoice with funds going to the CLIENT MONEY Bank Trust account, only one entry is made against A/R. The transaction in CLIENT MONEY is orphaned. Is a journal entry required?
I'm losing faith in Quickbooks and Intuit in general.
@@SCFoster quickbooks is an accounting software, not a property management software. Everything QB is doing is by design,
And correct. What ever you are doing and/or find disturbing is because of your lack of understanding of how the software was designed, but is OK because all accounting software has the same design. If you go with Xero or Sage... will get the same result
@@HectorGarciaCPA Not sure you meant the tone, so I'll give you the benefit of the doubt. I'm well aware of the ins and outs of software design, having many software patents under my belt. What you describe is not 'by design' but a limitation of the software. Intuit can choose to expand the functionality or not. It's their company and yes development dollars are not unlimited.
Thanks for the responses. They confirmed my observations.
@@SCFoster there was no “tone”
I just reassuring you that the software is OK and working as designed. What you might need is to change your process/approach to get the desired outcome
With the change in Intuits usage of classes is there a workaround to use Customer-sub customer to make this work on the P & L method?
yea, but will not be as clean
Hi, I would like to ask about managing the client's tenants? Is there a way to include this in the Profit and Loss approach? Can locations be used to track tenants unpaid rent?
With the P&L approach, you can’t really manage your clients A/R (Unpaid tenants) only with the Balance sheet approach.
@@HectorGarciaCPA Thank you for the reply
Hector, good video. For the second method, you use classes. However, Intuit has now limited classes to 40 for QB online Plus. One has to 'upgrade' to QB Online Pro for unlimited classes. The pricing is ridiculous at that level. So, do you still recommend using that approach, given the excessive cost?
Scott Foster when we made this video, the limited classes was not something we had foreseen. So if you got more than 40, you need to pay $150 a months unfortunately;
The only unlimited dimension we have under Plus is customers.
@@HectorGarciaCPA Hector, thanks for the quick response. One thing I'm exploring is Projects. Those are unlimited as far as I can tell, so that may provide the differentiation that classes would provide. Have you used Projects?
How security deposit can be an expense?
Is not an expense, ever.
Hi i have Quickbook and I want to enter bill for our subcontractors once I create item for his retention how should I linked thus item in expense accounts and income account
“Retention” is not something we do in US.. so you may be asking about VAT or tax-related withholding I canned answer
Hector, can you help set up online quickbooks for real estate brokerage? Have you ever integrated BrokerSumo?
David Russotti never used BrokerSumo
Hello. Thank you so much for the video. It's been truly helpful. I have a question, when I put record expense, it doesn't appear the customer line and I can't select it. What should I do?
Karen Betancourt you need to use QBO Plus
@@HectorGarciaCPA I currently have the Quickbooks online Plus. Do I have to do something in the settings?
I would like to know the cost of a class for this for an investor that has rental ...
I cant wait for part two .
Infinity Investment Inc Inc part two will come in a few months.. maybe October/November.
A private class is $425 with my partner Alex who is an expert on real estate. Email me Hector@garciacpa.com and I’ll connect you
What about the bookkeeping expense?
We assumed the property management expense covers that
YES
Agreed
Part 2?
In a few months
@@HectorGarciaCPA is it already online?
@@Thomasnatal no.. it wont be.. its only going to be in my private course portal
ok