Real estate books get messy fast: a separate LLC for every property, renovation costs that belong to one project, and tenant money that legally isn’t yours. We keep separate, reconciled books for rental investors, holding companies, house flippers and property managers, closed every month and ready for your tax CPA, your lender and your partners.
Bookkeeping for real estate investors and holding companies
- Separate books for each LLC or property-owning entity, with a combined view of the whole portfolio
- Income and expenses tracked by property, so you see what each building really earns
- Rent reconciled to the rent roll and to bank deposits every month
- Security deposits recorded as money owed to tenants, not as income
- Mortgage payments split into principal, interest and escrow from your lender’s statements
- Capital improvements kept apart from repairs, with a fixed asset list your CPA can use for depreciation
- Management fees, loans and transfers between your entities recorded on both sides
- A year-end package for each entity, ready for your tax CPA
Accounting for house flippers and small developers
- Every property set up as its own project, from purchase to sale
- Purchase and closing costs, renovation, contractor draws and holding costs tracked against the property
- Hard money and private lender loans, points and interest recorded correctly
- Profit on each flip worked out when it sells, so you know which deals made money
- Contractor W-9s collected and payments tracked for 1099 reporting
- Clean, project-level numbers your tax CPA can use to decide how each sale is taxed
Property management accounting and trust accounting
Rent and security deposits you collect for owners are held in trust. Most states require that money to sit in a separate trust account, never mixed with your company’s funds, with records that reconcile every month. The rules vary by state, so we set up your process around yours.
- Monthly three-way reconciliation: the trust bank balance, tenant ledgers and owner ledgers agree to the cent
- Security deposits tracked tenant by tenant, separate from rent
- Owner statements and distributions checked before they go out
- Your management company’s own books kept separate from client trust money
- Owner and vendor records organized for year-end 1099 reporting
- Trust records that are ready if your state’s real estate regulator reviews your accounts
Where real estate books usually go wrong
One file for every entity
Several LLCs run through one set of books make it hard to see each property’s profit and to show that the entities are really separate.
Deposits booked as income
Security deposits and prepaid rent recorded as revenue overstate your income and leave you short when tenants move out.
Repairs and improvements mixed
A new roof expensed like a plumbing repair, or the reverse, distorts your profit and your CPA’s depreciation schedule.
Software we work in
We work in the systems you already use: property management platforms such as Buildium and AppFolio, and accounting software such as QuickBooks Online, Xero and others. We connect bank feeds, rent collection and owner distributions so every system ties back to your books.
Frequently asked questions
Do you work with investors who hold properties in several LLCs?
Yes. Each entity gets its own books, and you also get a combined report for the whole portfolio. Transfers, loans and management fees between your entities are recorded on both sides, so the books tie out and stay defensible.
Do you prepare our tax returns?
No. We leave income tax filing to tax-focused CPA firms. We keep your books tax-ready all year and give your tax CPA a year-end package for each entity, including the fixed asset additions they need for depreciation.
Do you work in Buildium and AppFolio?
Yes. We reconcile trust accounts and owner and tenant ledgers in Buildium and AppFolio, review owner statements before they go out, and keep your company’s operating books there or in QuickBooks Online, Xero or another system you use.
What is a three-way reconciliation?
It compares three numbers every month: the trust account’s bank balance (adjusted for deposits in transit and outstanding checks), the total of your tenant ledgers and the total of your owner ledgers. All three must agree. If the bank holds more or less than the ledgers say, it points to an error or to money that was mixed or misapplied.
How should a house flipper track costs?
Set up each property as its own project and record every cost against it: purchase and closing costs, renovation, contractor draws, loan points and interest, insurance, utilities and taxes while you hold it. When the property sells, you see the real profit on that deal. Your tax CPA then decides how the sale is taxed.
Are security deposits income?
Not when you collect them if you plan to return them. The IRS says not to include a refundable security deposit in income when you receive it; an amount you keep, for example because a tenant breaks the lease, becomes income in the year you keep it. In the books, deposits are recorded as money owed to tenants.
What is the difference between a repair and a capital improvement?
A repair keeps a property in its normal working condition, such as fixing a leak, and is usually expensed. An improvement makes the property better, restores it or adapts it to a new use, such as a new roof or an addition, and is usually capitalized and depreciated. We flag the borderline items for your CPA.
How much does real estate bookkeeping cost?
Our monthly bookkeeping starts at $599 and depends on the number of entities, properties or doors and how many transactions you have. See our pricing for sample packages, or tell us about your portfolio for a fixed quote.
Get your property books in order
Tell us how many entities, properties or doors you have, and we’ll recommend the right level of support.