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Level 1

Real estates set up

I would like to know how to set up a real estate property I bought in quick books.

I saw that a lot of people are saying thatI need one Asset account and a sub-account asset account.

can someone explain why.

thanks!

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Best answer 12-10-2018

Best Answers
Level 6

Setup depends on who you are and what you have. If you ow...

Setup depends on who you are and what you have. If you own one rental property, you can make your tenants a customers.  If you own several properties, you can use classes to separate the properties and run separate profit and loss reports for each property.  Tenants can still be your customers.  You would classify each transaction.

If you are a property management firm, you would use the sub-customers.  If you don't have the class feature, you can use sub accts.   But it tends to make the chart of accts very large and cumbersome.

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8 Comments
Level 6

Setup depends on who you are and what you have. If you ow...

Setup depends on who you are and what you have. If you own one rental property, you can make your tenants a customers.  If you own several properties, you can use classes to separate the properties and run separate profit and loss reports for each property.  Tenants can still be your customers.  You would classify each transaction.

If you are a property management firm, you would use the sub-customers.  If you don't have the class feature, you can use sub accts.   But it tends to make the chart of accts very large and cumbersome.

View solution in original post

Level 1

my question is how to set it up as an asset?

my question is how to set it up as an asset?
Level 1

What kind of company do you set up - real estate? rental...

What kind of company do you set up - real estate? rental company?  something else?
Level 1

real estate

real estate
Level 15

"how to set it up as an asset?" "I saw that a lot of peop...

"how to set it up as an asset?"

"I saw that a lot of people are saying thatI need one Asset account and a sub-account asset account.

can someone explain why."

Property is a Fixed Asset and it helps to give yourself Clarity. Like This:

123 Easy Street <== Parent level account, do not use

Subaccount: Basis Buildings <== Cost here, split off Land

Subaccount: Improvements <== not ongoing Repairs and Maintenance, but Improvements after purchase

Subaccount: Depreciation

Subaccount: Land <== Land never depreciates




Level 1

Re: "how to set it up as an asset?" "I saw that a lot of peop...

Question?

Under improvements, would you then create sub-accounts for those improvements (i.e., installation of new driveway, new roof, new fencing, etc. ) as some of these items are capital improvements and may be depreciated?  Also, what about appliances?  

 

Thanks.

Level 1

Re: "how to set it up as an asset?" "I saw that a lot of peop...

The purpose of the Asset account is to track the real estate basis value, for depreciation purposes (as well as resale). So I would only put improvements in the Asset account that increase the basis value of the property which will then effect the depreciation schedule.

 

The treatment of appliances is a matter of preference. I would consider the purchase of the property including all appliances as part of the basis and depreciate the property. If you wanted to get more complicated, you can split off the appliances as their own assets, and lower the basis of the property accordingly. This will lower the basis of the property, which might increase capital gains taxes at resale. The benefit would be deducting the cost of the appliances as a write off the first year, since the appliances would be below the cap limit for fixed assets (typically $2500 ea).    

 

 

 

Anonymous
Not applicable

Re: "how to set it up as an asset?" "I saw that a lot of peop...

AJ I saw your comment for RE Investment for Quickbooks on another post. Are you a bookkeeper?  Interested in discussing more about it. Email me at [email address removed]

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