QuickBooks is used by millions of people worldwide, including real estate investors. While the software is good for generating basic financial reports, it can be frustrating to figure out how to run a rent roll with QuickBooks.

In this article, we’ll begin by reviewing what a rent roll should include, explain the steps to follow to rent QuickBooks’ version of a rent roll, and also offer an easier alternative for generating a traditional rental roll that landlords, investors, and lenders use.

Key takeaways

• A rent roll provides information on a tenant, a lease, a tenant’s rent payment history, and rent received for the month all in one place.
• Even though the software isn’t specifically designed for real estate investors, it is possible to create a rent roll with QuickBooks.
• Before using QuickBooks, an investor must create a chart of accounts, enter a property as a Class, a tenant as a Customer, and rent as an Item.
• To create a traditional rent roll with QuickBooks, an investor must also create custom defined fields for items such as security deposit, move-in date, and late fees.
• A good alternative to using QuickBooks is Stessa rental property software designed by real estate investors for real estate investors.

What is a rent roll?

A rent roll provides information on a tenant, a lease, and a tenant’s rent payment history all in one place. Landlords, real estate investors, and lenders all use a rent roll when analyzing a rental property.

For example, a landlord can tell at a glance whether a tenant is current on the rent and if a lease is coming up for renewal in the next few months. If it is, a landlord can contact the tenant about signing a new lease, or begin marketing the home for rent if a tenant does not plan on staying.

An investor, lender, and landlord may also use a rent roll to help forecast the future rental income and potential change in cash flow from a property. After running updated rent comparables, a rent roll may reveal that there is room to raise the monthly rent when renewing a lease. 

On the other hand, by analyzing a rent roll, a lender or potential buyer may discover that the current rent is above market for similar homes in the same area, and will likely need to be reduced in order to avoid losing a tenant.

By comparing rental income to operating expenses, an investor can also get a snapshot of the current and potential net operating income and cash flow a property is generating to better determine property value. 

Can QuickBooks create a rent roll?

QuickBooks was launched back in 1983 and today is practically a household name. Millions of small and medium-sized businesses use QuickBooks for tasks like accounting and payroll, including a fair amount of real estate investors.

Although the QuickBooks software wasn’t specifically written for rental property owners, it is possible to create a rent roll using QuickBooks.

What to do before using QuickBooks for a rent roll 

Before using QuickBooks to create a rent roll, a company file must be created to keep track of rental income and a tenant’s security deposit. In QuickBooks, each rental property is known as a “Class,” each tenant is called a “Customer,” and rental income is called an “Item or Product.”

After creating business banking accounts, the next step is to set up a chart of accounts using IRS Schedule E (Form 1040) as a guide. There should be a line item on the chart of accounts for each type of rental income, including monthly rent, appliance or pet rent, late fees, or miscellaneous income. 

In addition to setting up a chart of accounts, custom defined fields such as move-in date, security deposit, monthly rent, pet fees, due date, and late fees must be created to generate a report in QuickBooks that looks like a normal rent roll.

When a new tenant moves in, a recurring invoice for the first month of rent, any pro rated rent,  and security deposit due is created. Then, when the move-in payment is received from a tenant, the security deposit is recorded on the balance sheet as a short-term liability and the rent must be credited to the correct tenant and property, and the right bank account.

If these steps are not done properly, a rent roll from QuickBooks will be incorrect. Rent payments may be credited to the wrong tenant or account, making it appear that a tenant did not pay the rent when they actually paid on time. 

How to create a rent roll with QuickBooks

It can take time to set up a rental property and tenant in QuickBooks, but the good news is that it only has to be done once. Unless, of course, the home is rented to a different tenant or an investor purchases another rental property.

Here are the steps to follow to create a rent roll using QuickBooks, once a file is set up and rent is being tracked:

• Select “Reports” from the top of the screen, then choose “Customers & Receivables” from the drop down menu.
• From the “Customers & Receivables” dropdown, select “Customer Balance Detail” which is what a rental roll is called in QuickBooks.
• “Customer Balance Detail” report will show a tenant’s name, when the rent invoice was paid, the amount paid, and any remaining balance due year-to-date.
• A second “Customer Balance Detail” report can then be created by selecting defined custom report fields including tenant move-in date, security deposit, monthly rent, and due date.
• The “Customer Balance Detail” report can also be modified to show different calendar periods, such as the current month or quarter.

After following these steps to create a rent roll with QuickBooks, a landlord or property manager should end up with a report that looks like a regular rent roll.

Using Stessa for a rent roll instead of QuickBooks

While it’s possible to use QuickBooks for a rent roll, there is a faster and better way. Stessa was designed by rental property owners for rental property owners to provide real estate tools such as a rent roll to the investment community for free.

A rent roll report from Stessa lets a landlord see tenants, leases, and units all on a single page with just one click. After setting up the Leases & Tenants page to reflect the current status of each property, simply run a Rent Roll Report to create a clean one-page summary that can be shared with business partners or a lender.

Stessa’s Rent Roll is organized by Portfolio and then Property, with each line of the report representing a specific unit or property, with property details on the left of the report and current tenant details on the right. The Rent Roll can be generated as a PDF, or Excel spreadsheet if an investor needs to do some fine tuning.

Closing thoughts

A rent roll summarizes the occupancy of each home in a rental property portfolio, and includes key information such as tenant name and rent amount, monthly rent paid, security deposit, and the beginning and ending date of a lease. 

Landlords, investors, and lenders use a rent roll to help improve cash flow, analyze potential deals for investment, and as part of the due diligence process when buying or refinancing. 

Using QuickBooks to create a rent roll is definitely doable, but it takes time and effort. Investors looking for a better way can sign up for a free account with Stessa, and run a rent roll with just one click.