They say that real estate is a numbers game. To make the most of rental property, investors use rental property accounting systems to manage income and expenses, leverage debt with equity, and keep track of owner’s equity.
Many investors are familiar with Quicken, the personal finance accounting software launched in 1983. Although Quicken used to offer a version specifically for rental property management, it has since been rolled into Quicken Home & Business.
However, it’s still worth taking a look at how to use Quicken for rental property, simply because so many people are familiar with the software and brand name.
Key takeaways
- Rental property systems are used to track income and expenses, tenant information, and generate financial reports.
- Options for rental property accounting are worksheets, accounting software, and property management systems.
- Quicken and Stessa—a Roofstock company—are 2 rental property accounting software options.
- Stessa is free to use, while Quicken requires a paid annual subscription.
Rental property accounting options
There are 4 main rental property accounting options to choose from:
Worksheets
Virtually every computing device and smartphone comes with a spreadsheet program preinstalled, and most people know how to set up a basic worksheet. In a way, programs like Excel, Numbers, Sheets, and OpenOffice Calc are electronic versions of tracking income and expenses by hand.
Using a worksheet can be a decent default option when an investor is just starting out with one or 2 rental properties. Spreadsheet templates like this one can be downloaded for free and customized for an investor’s specific needs.
Accounting software
After using a worksheet for a while, many investors upgrade to an accounting software system for bookkeeping. While Stessa is the only free accounting software specifically designed for rental property, general-purpose accounting programs come with a generic chart of accounts that can be modified for real estate investing.
Accounting software uses a double-entry bookkeeping system, so that each entry made has an effect on at least 2 accounts.
For example, receiving rent from a tenant will increase an owner’s business checking account balance and record rental revenue on the property’s profit and loss (P&L) statement. Or, each time a mortgage payment is made, the checking account balance will be reduced along with the outstanding mortgage liability on the real estate balance sheet, while owner’s equity will be increased.
Accounting software can also be used to generate accurate and professional reports, such as income and net cash-flow statements and capital expense reports. Having a professional appearance may be important when applying for a refinance, purchasing another rental property, or sharing financial information with real estate investing partners.
Property management systems
Property management systems combine all the advantages of an accounting system with other tools to manage a rental property. Some of the best free or low-cost property management systems for rental property include AppFolio, Cozy, Stessa, and TenantCloud.
Rental property management systems automate basic tasks, such as marketing vacancies, screening tenants, signing leases online, collecting the monthly rent, and processing maintenance requests. Tools like these can help investors keep cash flow up, by making it easy for a tenant to pay the rent on time, and vacancy low, by providing features that today’s tenants expect.
While there are a number of benefits to a comprehensive property management system, they can be complicated, expensive, and provide features that many rental property owners don’t need.
Quicken for rental property
Quicken Home & Business is personal accounting software that combines the previously separate Home & Business and Rental Property Manager versions. Quicken was launched in 1983 as a free service and has since transitioned to an annual subscription service.
Quicken promises to simply manage a rental property by providing everything an investor needs in one place:
- Track tenant rent payments, including partial payments and late fees, across multiple units and properties.
- Make it easier for a tenant to pay by sending rent statements and email reminders with a payment link to pay rent online.
- Automate income and expense entries, tenant information, rental property values, and bank loans.
- Maintain a file for each tenant with contact information, move-in and move-out dates, lease terms, and security deposits received.
- Run Schedule E for a rental property and other tax reports and export directly to TurboTax when tax season rolls around.
Quicken on the Web works with the desktop version of Quicken, while Quicken’s mobile app helps investors manage rental property on the go.
How Quicken works
The first step to use Quicken for rental property is to sign up for a Home & Business subscription for $103.99 per year. However, before subscribing to Quicken, there are 2 things to keep in mind.
First, the company doesn’t offer a free trial period, although there is a 30-day, risk-free guarantee. Second, the Quicken Home & Business desktop app only works with Windows, although the software does sync with Quicken’s mobile app for iOS and Android and the Quicken web companion.
After signing up for a paid account, follow these steps to add a rental property and tenant to Quicken:
- Click the Rental Property tab.
- Select Property & Tenants from the menu.
- Add Property, including the name (if applicable), property address, and type of property (single-family or multifamily unit).
- Click OK to save the property.
- Select the Property & Tenants menu, then Add Tenant information, including contact, monthly rent, security deposit, and move-in and move-out dates.
- Click OK to save the tenant to the property.
The Rent Center tab can be used to enter rental income and expenses, the Business tab can be used to add customers and vendors, and the Tools tab can be used as an address book for customers and vendors.
Documents relating to a tenant, customer, or vendor can also be uploaded by selecting the Documents tab, choosing Attach, then selecting the appropriate documents from the desktop.
Best Quicken alternatives for rental property
While Quicken may be a good match for people who are already familiar with the software, there are arguably better software options available that are specifically designed for rental property investors.
Landlord Gurus has over 30 years of experience providing expert advice to residential landlords and property managers. Landlord Gurus recently analyzed some of the top rental property software on the market using criteria like expense tracking, bank integration, reporting, tax preparation, and cost.
The company selected the best overall software for rental property, the best all-inclusive property management application, and the best software for tax preparation.
Best overall software for rental property
Landlord Gurus ranks Stessa as the best overall rental property software. Stessa received top scores for asset management and accounting software, smart money management, automated income and expense tracking, personalized reporting, and more.
Stessa is free to use, and setting up a property online is quick and easy. Simply enter the rental property address, link bank and mortgage accounts used with the property, and use the Owner Dashboard to monitor property performance at the portfolio and property levels and generate financial reports with a single click.
Real estate investors with SFR property, residential multifamily, and short-term and vacation rentals can use Stessa to automate income and expense tracking, maximize profits through smart money management, and create records.
Stessa features include:
- Automated income and expense tracking via linked bank accounts
- Property tracking
- Performance dashboards at the portfolio and property levels
- Numerous monthly and financial reports
- Export tax-ready financials
- Free access to the Stessa Tax Center with specialized tax resources and a TurboTax discount
- Secure online document storage
- Anytime access
- Smartphone apps available for iOS and Android
While Stessa is free, the company does provide optional premium services, such as rent analysis and market research.
Best all-inclusive landlord-tenant app
RentRedi was selected by Landlord Gurus as the runner-up to Stessa. The software is a mobile app for managing vacancies, screening prospective tenants, signing and storing leases, collecting rent, and coordinating maintenance.
RentRedi subscription plans range from $9 a month for a prepaid annual plan to $19.95 a month.
Best for tax preparation
Rentec Direct was rated as the best tax preparation software by Landlord Gurus. The software is designed for DIY landlords and property managers, and it allows users to market vacant properties, screen tenants, receive online rent payments, and track income and expenses.
Pricing for Rentec Direct is $35 to $45 a month for one unit, after a free, 2-week trial period.
