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Level 1

Best way to set up multiple rental properties?

I have a client with a regular service business, but he also has 6-8 individual rental properties.  I think we will set up separate LLCs for each property.  What is best way to hande in QB Online?  I have not dealt with rentals before.  Should each property be set up as a separate company with it's own asset (the rental), income, and expenses to get an income statement for each?  Or is there a way to set them up in one company in QB.  Is Online the right product to use?  I can't find anywhere online, but I think QBO charges per company setup, so having 8 different companies could get expensive.  Thanks.

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Best answer 01-15-2018

Accepted Solutions
Level 15

Re: Best way to set up multiple rental properties?

@ejaigner

 

The prevaling rhetoric on the net is one LLC per property, which per the IRS means one accounting file for each, so yes in QBO that is one subscription per company.  You can get by with essentials if it is one property per llc.

desktop is one purchase price and as many companies as you wish (as your hard drive will hold).

He needs to consult with a couple of business lawyers as to whether or not multiple llc's is the way to go.

If all the rentals are kept in one company, then QBO Plus is needed, only one subscription though.

a single subscription to QBO is 3-4 times as expensive as desktop over the 3 year support life of desktop, see this comparison, the cost is toward the bottom of the article.  a non partisan comparison of QBO vs QB desktop
http://onsale-apparel.com/Rustler/qbo-or-qbdt

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12 Comments
Level 15

Re: Best way to set up multiple rental properties?

@ejaigner

 

The prevaling rhetoric on the net is one LLC per property, which per the IRS means one accounting file for each, so yes in QBO that is one subscription per company.  You can get by with essentials if it is one property per llc.

desktop is one purchase price and as many companies as you wish (as your hard drive will hold).

He needs to consult with a couple of business lawyers as to whether or not multiple llc's is the way to go.

If all the rentals are kept in one company, then QBO Plus is needed, only one subscription though.

a single subscription to QBO is 3-4 times as expensive as desktop over the 3 year support life of desktop, see this comparison, the cost is toward the bottom of the article.  a non partisan comparison of QBO vs QB desktop
http://onsale-apparel.com/Rustler/qbo-or-qbdt

View solution in original post

Level 1

Re: Best way to set up multiple rental properties?

I have the exact same issue but am constantly travelling. Our bookkeeper is in one place, but I need access to Quickbooks as well, which makes it difficult if only one computer is licensed for Quickbooks Desktop. One work around could be to purchase two copies of Quickbooks Desktop and constantly update with a backup file from myself and our bookkeeper, but this seems ripe for mistakes to occur. Is it possible to set up multiple properties within Quickbooks Online Plus? I've heard talks of setting up different classes for the different LLCs, but am not sure if this will actually work. In summary, we'd like to manage all of the LLCs online with the least expensive option possible. Ideally, the solution would allow for creating consolidated financial statements of all the properties or a select number of the properties (properties 1 - 5 in a consolidated financial report, properties 1 & 4 only in a consolidated financial report, etc.).

Level 1

Re: Best way to set up multiple rental properties?

What did you end up doing? I am in the same situation.

Level 10

Re: Best way to set up multiple rental properties?


@AlkisV wrote:

What did you end up doing? I am in the same situation.


If you file all the LLCs in one tax return with separate Schedules for each one, and they all use the same accounting method, then you can use one QBO Plus subscription, and use a Class for each LLC. This is for tax purposes. The risk is liability protection may be jeopardized

Level 2

Re: Best way to set up multiple rental properties?

I have new client with 5 rental properties. CPA files a 1040 with 5 Sch E's attached.  No invoicing.  Owner deposits rental income for each property separately and expenses separately all to one bank account.  Obviously, I need to provide the CPA with P&L for each property. expenses can be set up for  Maintenance etc paid from the same bank account.  SO  I am in process of setting up COA and was setting up each property  separately.  I did not use  "class" and want to have the report as simple as possible without setting up Customer, etc. I can enter deposits directly by going to DEPOSITS and then using property to whatever one t goes into and the same with expenses.  I am going to see how this setup works for the P&L per Property...  Any input is welcome.  Thanks in advance

 

Level 1

Re: Best way to set up multiple rental properties?

I am also interested in this topic; however, I am more interested in the finer details.  I have one LLC with one property but 4 units in each.  I am at the company setup dialog for Desktop Premier 2019 (I know, I don't need Premier - but that goes off the topic.... lets just suffice it to say that is what I have).  Do I add the rental units as products, services, or leave the products and services empty?  I have a property manager that collects the rents and forwards them to me itemizing the collections in an income spreadsheet, itemizing the rents received from each unit.  I am just not sure how to setup the company file most efficiently.

Moderator

Re: Best way to set up multiple rental properties?

Hello, TheDoctor165,

 

Welcome to the Community and thanks for joining the thread.

 

Let me share information about the Item types available in QuickBooks Desktop.

 

The items set up into your account shows up as a line on an invoice or other sales forms. Upon adding items, QuickBooks provides different item types that you can choose. For guidance in setting up, you can check out this article: Add, edit, and delete items.

 

As for your question if you'd add rental units as products, services or leave the products and services empty, I'd recommend reaching out to your Accountant to ensure that this items will be track and accounted properly.

 

For future reference, I'm attaching a great resource that you can check: Create a property management company.

 

If you have further questions, please feel free to visit the Community again. Have a great day!

Level 5

Re: Best way to set up multiple rental properties?

If you have multiple LLC's, then you will have multiple bank accounts, multiple tax ID numbers, etc.  The problem is not with the income/expense side, which can be easily split across several tax returns.  The problem is with the balance sheet.  It would be difficult or impossible to know exactly which assets/liabilities relate to which LLC.  This is called "comingling" and it generally should be avoided as it can lead to errors when a property is sold or disposed and an incomplete or incorrect set of assets/liabilities are removed from the books.

So I would say one QB company file per entity.

I would recommend a consultation with an atty regarding a single or multiple LLC's.  LLC is an asset protection strategy, and it can be void if you don't run the LLC correctly and/or comingle.  I've seen some bad outcomes. 

If you choose to use a single entity for multiple properties, then using the class feature is the way to go to simplify the profit/loss reporting.  You will also need to pay careful attention to the balance sheet fixed asset section to keep the asset cost basis straight.

Holler if questions.

Mark Wagner, CPA

Level 1

USING CLASSes for multiple rental properties?

Is there a definitive discussion, or white paper or tutorial on how to use CLASS most effectvely in QB.

It in increasingly obvious that QBO is simply Intuit's attempt to compete with QUICKEN, (which works fine) and is not truly meant to replace the very good functionality of the DESKTOP.

Way to go Intuit. . . claim they are equal but leave out fuctionaliity.

QuickBooks Team

Re: USING CLASSes for multiple rental properties?

I can provide information about the class tracking feature in QuickBooks Online, TN-landlord.

 

This feature helps you track income, expenses, and profitability by segments. 

 

Using this feature helps you organize your customer and vendor transactions by class. You can also run reports by class to check the sales and expenses. Then, you can also create a budget for each class. This lets you plan and set goal for each segment in your company. I've got the article for more information. 

 

If there's anything else you need, please let us know. We'd be happy to help you. 

Level 1

Re: USING CLASSes for multiple rental properties?

Does this not work in the Desktop version?  I only have three properties, all duplexes.  An I use Rentalutions for accepting my rents, and keeping track of my tenants, leases, payments, etc and they are attached to my bank accounts; so all I want to do is input the information of rents received per unit and fixes per unit and bills per building/property.  How do I set this up?  I just want a place to put in all my reciepts and have a nice simple ledger to send to my accountant every year.

QuickBooks Team

Re: USING CLASSes for multiple rental properties?

Thanks for joining us here, @Michelka.

 

I'm here to help share some insights on how you can track rents and handle your tenants transactions in QuickBooks Desktop. 

 

To record your transaction in QuickBooks Desktop, you'll need to enter it by property and process it manually. To do that, you'll need to set up the tenant's as jobs and categorize them afterward.

 

Right after the setup, you can now receive payments and make a deposit. Below are the steps to follow.

 

To receive payments by property:

  1. From the Customers menu, choose Receive Payments.
  2. From the Account drop-down, select the accounts receivable sub-account for the property.
  3. From the Customer:Job drop-down, select the tenant.
  4. Enter the amount of the payment.
  5. If you have multiple payments on a property (for example, for an apartment with several rental units), select Group with other undeposited funds.
  6. Select Next.
  7. Continue entering all the payments for the property.

To make deposits in QuickBooks:

  1. From the Banking menu, select Make Deposits.
  2. In the Payments to Deposit window, select the payments to deposit, then select OK.
  3. In the Make Deposits window, select the Deposit To drop-down, then choose the checking sub-account for the property.
  4. Save the deposit.

To give you the complete details of this process, please check out this link: Create a property management company.

 

However, you also have the option to connect Rentalutions with QuickBooks Desktop to sync your transactions automatically. In doing that, you'll need to reach out to our Intuit Developer. This team is the best avenue to visit when it comes to apps integration in QuickBooks.

 

This should get you moving today.

 

I'm just a reply away should you have any other questions about this. I'm always up to provide further assistance. Thanks for coming and have a good one!

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