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Rental mortgage category?

danebdaneb Member Posts: 1

I just setup my business on Wave and the business operates a rental property. I connected my business bank account and imported transactions. I'm categorizing said transactions, but I'm stuck on the mortgage expense. A rental mortgage isn't considered operating income (at least for the purposes of calculating NOI) and I can't seem to find a good category type for it (e.g. Operating Expense, Cost of Goods Sold, etc.). What should the category type be? COGS?

in Accounting Technical Support

Comments

  • KiahDKiahD Administrator Posts: 267 admin

    Hi @daneb !

    If I'm understanding you correctly, the mortgage expense is technically the re-payment of a loan, so there are two different methods that you can use in Wave to record this. Both include creating an account in your Chart of Accounts under Liabilities & Credit Cards > Loan & Line of Credit, which you can use this to categorise your mortgage payments.

    The two different methods are explained further in our Help Centre articles here (Income and Expense transactions) and here (Journal Transaction).

    That said, tracking of mortgage loans in particular may have specific complications, which are a little outside of what we can advise on. I would highly recommend also reaching out to a registered CPA to ensure that you're recording these mortgage payments correctly :smile:

    edited February 18, 2021
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