Real Estate Investment Property Management Statement tracking in Wave
Limestone
Member Posts: 2
We have 3 investment properties managed by a Property Management company, they collect the rent, take off various expenses then send the rest as one deposit to the bank account. Our bank account is linked so we see the final deposited amount but need a way to account for the various expenses which I can do as we have for utilities for each property but to make all balance I'm unclear with how I should track the rent amount collected by the PM. Example would be 2 apartments with rent income of 2x $1500, Income prepaid utilities $100, landscaping expense $100, Property Management expense $300. Deposited into our account is $2700. Is the best way creating an invoice every month with revenue collected less expenses?
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Hi @Limestone
See below how you need to define the product and then create an recurring invoice for the individual property
You can customise the invoice and hide the relevant fields so that they will not appear in invoice
You could enter as money received the difference between the gross rent and the amount received (using cash account for example) and then enter the expenses deducted by the agents as if they were also paid from the same account (eg cash account) so that the end result in the selected bank/cash account is NIL. You would obviously allocate the income element to rents received and the expenses to whatever the appropriate expense accounts would be.
Regards
Can you run a P&L by each investment property?
The simple answer is NO, unfortunately. There are only 2 ways to do this - either have a Wave account for each property OR export your data to CSV files where you can use filtering and/or pivot tables to analyse your results between properties.
Actually, you can do this. We have consulted with an accountant that works for Wave, and he recommended creating separate companies for each property, all under the same Wave account. So we have multiple companies like this:
Acme Rentals
(our main bank account for transactions that can't be allocated to any one property)
Acme Rentals (123 Main Street)
(checking and savings bank accounts for property located at 123 Main Street; rent and maintenance expenses use the checking account and get recorded as income/expenses in Wave, security deposits use the savings account as per state requirements and get recorded as liabilities in Wave)
... and so on for each property.
Each "company" has tenants set up as customers so each transaction can be assigned to a customer. This is helpful for when a property changes tenants (after a lease ends) as well as for properties that have multiple units (such as duplexes).
Hope this helps!
Does all of our property maintenance and renta income transactions operate from the same shared bank account or do you have an account for each property?
Does all of our property maintenance and rental income transactions operate from the same shared bank account or do you have an account for each property?
We used to operate all properties from the same bank account and it became a royal mess so we switched to 2 accounts per property and it's much better (checking for all transactions except for security deposits, because our state requires that security deposits are stored in an interest-bearing savings account). We did keep the original checking account as the "main" account for the rental business, so for example, we pay for office supplies from this main account.
Here is one example of why you need separate accounts. Let's say that you have a contested eviction. You will need to supply your attorney and the court with a bank statement proving your tenant's late payments or non-payments. If you have a separate bank account for this property then all you need is to print your bank statement for that account. But if you have multiple tenants' rent all going into the same bank account then you will need to create a lengthy "presentation" with supporting documents showing which payment is from which tenant.
So, I also have 3 properties with multiple units. What I'm trying to do is similar, but I thought there was a way to tag transactions. For instance. Property 123 Main has plumber bill, I use one LLC checking account for all 3 properties, but when that bill gets paid, I want to categorize it as maintenance and tag it for 123 Main. This way I can run separate reports based on the tag. I can then do any financial analysis based on each individual house.
Any suggestion on how do do this in Wave?
It seems that having a separate bank account for each property can get unwieldy as well as the portfolio grows.
Hey @zogster , tagging isn't currently possible in Wave. The only way to handle this would be to create a different business for each rental property, but this also limits your ability to generate reports based on numerous rental properties at once.
@zogster I also have multiple properties and one bank account. I setup each property as a vendor and "tag" all expenses to the right property using "add vendor" in the Transactions screen. I'm then able to see expenses by property>account>merchant in the "purchases by vendor" report. I try to use consistent names in the "Merchant" field when I upload receipts to Wave so it's easier to manipulate the exported data in Excel if needed. Not perfect but it's worked well for quickly separating operating expenses in a logical way.