Real estate and property management are a very lucrative and capital intensive business. If run effectively, it can reward investors consistently but the reverse might be the case if cash flows are not properly tracked.
In this guide, I will be sharing useful tips on how I implemented QuickBooks for a property investment company in Nigeria and how you can deploy similar techniques in less time.
Tracking All Property Portfolio
I created all the properties owned as an investment property which is a non-current asset and enter their respective value as opening balances.
You might ask, what if the price changes, how will you enter it into the system? There is general journal feature designed to help you revalue each property and take the surplus/deficit to the retained earning.
In a situation where you pool funds from clients and invest in property here are steps to follow:
- Create a service item called ‘real estate investment trust service’
- Under the income account, map it to a ‘Liability account’
When a client pays into your account, create a receipt and select the bank such payment was credited into.
Tracking Rental Income;
For income earned on each property via rent; Use journal entry to record such transaction.
- Credit your rental income account
- Debit the bank account the rent was paid into.
On profit distribution to property investors;
- Credit your bank account
- Debit retained earnings account with the actual amount paid.
Other transaction entries like expense payment, bank reconciliation et all remain the same.
For inquiries on how we can implement QuickBooks for your property investment company, send a mail to info@accountingsoftware.com.ng