As a landlord, it is likely your days are filled to the brim with tasks that you are required to perform. You quite possibly have a full-time job, family and home of your own. On top of that, you have a rental property plus tenants to take care of, too. It can be very difficult to manage everything, and if you lack organization, it can feel very stressful.
No matter how busy you become, it is extremely important you keep up to date with the accounting side of your rental property. This is a factor that can determine success or failure of the business. On a smaller scale, you could be missing out on receiving money. However, the bigger consequences could result in accusations of tax fraud and evasion. This can cause irreparable damage to your company’s reputation.
Fortunately, when it comes to the financial side of the rental business, there are several great accounting software tools landlords can utilize to support various aspects of their business. They can help you to save time and money as well as stay organized. In this blog post, we review the different options available to you, specifically looking at them from the perspective of a landlord.
The essential features you must look for are:
- Ease of use
- Security of the platform
Beyond that, you will find that most of the accounting software options differ slightly. There are choices available for various budgets – we will break each down here.
Essential Accounting Features for Landlords
We are going to look at 3 of the best accounting software choices as well as our own rent collection service and assess which are the most useful for landlords.
The three accounting options all include the following 3 features:
- Basic invoicing and management of expenses
- Syncing with bank transactions
- Reporting (including sales reports and ongoing tax overviews)
One of the most well-known and loved online accounting software solutions is Wave. Here is what they have to say about their service:
Running a small business is different. We get it.
The more successful you get, the more distractions you have: chasing payments, tracking expenses, managing employees and taxes.
At each step, Wave makes it easy. [source]
Wave is pretty much free, except for their payroll and payments options. The software allows you to quickly and easily create and send professional, slick-looking invoices and receipts. You can collate your transactions into easily digestible reports, providing that your bank or payment provider supports it. This even includes PayPal, which connects seamlessly with Wave.
Notable time savers include the option to set up recurring invoices, automated reporting and receipt scanning, which virtually eliminates manual data entry. The software is ad-supported, but these don’t impact the service too much.
Wave is great for landlords because it allows you to keep track of payments, bills and expenses at a glance. You will know quickly if your rent has not been received on time and take swift action.
Wave is cloud based and offers fantastic business support online with blog posts, articles and tips for entrepreneurs.
FreshBooks is another easy-to-use accounting software option that is incredibly popular with small businesses. Here is what they say about their service:
Small Business Accounting Software
Designed For You
FreshBooks makes your accounting tasks easy, fast and secure.
Start sending invoices, tracking time and capturing expenses in minutes. [source]
You can try FreshBooks free for 30 days. Thereafter, it will cost you around $20 for the basic package. It offers everything Wave does, including a payroll add-on if needed. The main differences are that transactions have to be manually imported from your bank or payment provider when using FreshBooks.
The main benefit that FreshBooks has over Wave is a time tracker. This may not be useful to you as a landlord, but if you have another business and want to keep an eye on where you spend your time, this could be what you are looking for.
With seamless connection between the mobile and desktop versions, you can track your time throughout the day, attaching chunks of productivity to a specific task or client. When it comes time to draw up an invoice, it is simple to attach detailed time records.
Another add-on offered by FreshBooks is printed invoicing for those tenants who request this feature. FreshBooks takes care of everything for you, so there is no need to worry about making it to the post office on time.
Their site is super-informative with webinars and other free information that is useful for entrepreneurs.
QuickBooks is probably the best known online accounting solution, as it is well established and has been around for a long time. Therefore, it’s no surprise it pretty much offers a one-stop shop for your accounting needs, many of which are useful for landlords. Here is their quote:
Easy accounting software.
Built for your small business.
Approved by accountants. [source]
This option is great if you are looking to grow your business. It imports transactions from your bank or payment provider quickly and continually checks for new transactions to process. Reports are slick and easy to read.
Features include bill management, invoicing and tax. While you can try QuickBooks for free for 30 days, you will need to move onto one of their various payment plans, which varies depending on the features you prefer. Plans typically range from $10 to $40 per month.
QuickBooks offers a small business center which shares hints, tips and advice. It has proven very popular with business owners using this service.
Here at the Landlordstation, we tailor our accounting software specifically to the needs of landlords, and we focus particularly on receiving rental payments – which is, after all, a very important aspect of your rental business!
Our online rent payment solution electronically collects rent payments, application fees and more. This will streamline the process of collecting money for you and also maintain records automatically. Our software is easy to set up, and integrates with your existing account dashboard, so you can stay organized even if you have multiple properties. Our primary aim is to save you time and money. No longer is there a need to send rental reminders to your tenants or to queue at the bank in order to make deposits.
Once you have set up a secure bank account on our secure system, each tenant is given a unique login and they can make payments directly to the system. They even have the option to set up recurring payments, meaning they no longer need to remember to make payments.
We cover all eventualities, however, and send email reminders to your tenants when rent is due. They will be notified automatically when their payment is received. If a payment is late, we will tell them, too. In addition to the rental payments, our system is also useful for miscellaneous payments and deposits, for example.
Take a look at what Alex P., a residential broker, had to say about the LandlordStation’s rent payment service:
I love the organization! My tenants pay rent online and I can keep all of their signed documents completely organized by property so that I don’t worry about names getting mixed up.
There are numerous software accounting options available to you, and often the choice will come down to your personal preference regarding the offered features. The solutions we have reviewed in this post today are affordable for most budgets and will undoubtedly save you time and money in the long-run. It may be beneficial to take advantage of the free trials to see which works for you and which is best suited to your business needs. Of course, as a landlord, your needs will be quite specific, with rent collection being high on your wish list.
A red flag to be aware of are systems requiring time-consuming data entry. The great news is that any of these accounting software tools will help you keep a close eye on the movement of money into and out of your rental business. This will prove useful not only when it comes time to file taxes, but also if you are considering expanding. The financial data can be analyzed and used to determine if you are in a position to take on further loans to purchase more property and expand. Even if that is not your goal, it is essential for the smooth running of a business of any size to remain organized when it comes to finances.