Rental property accounting
Practical guides for clearer rental books.
Independent guidance on rent, deposits, loans, expenses, assets, depreciation, and year-end records. Written for rental owners who want to understand the accounting before choosing a tool.
Bookkeeping fundamentals
4 guides
Cash vs. Accrual Accounting for Rental Property
Choose a method that fits your reporting obligations, then apply it consistently to income and expenses.
Best Chart of Accounts for Landlords
Use a stable account structure for financial meaning, then use property and unit dimensions for operational detail.
How Do I Record Owner Contributions and Draws?
Owner funding and withdrawals generally belong in equity, not rental income or property expense.
Rental Property Bookkeeping Checklist
A repeatable close process catches missing transactions before they become year-end problems.
Income and tenants
3 guides
How Do I Account for Security Deposits?
Treat refundable deposits as money held for a tenant, not as rental income, until the facts change.
How Do I Record Rental Income, Advance Rent, and Late Fees?
Classify tenant receipts by what they represent, not merely by which bank deposit contains them.
How Do I Record Unpaid Rent and Bad Debt?
The correct entry depends on whether rent was previously recognized as income.
Property and financing
5 guides
How Do I Record Escrow Transactions?
Treat money placed into mortgage escrow separately from the tax or insurance expense paid later.
How Do I Record a Rental Property Mortgage Payment?
Only the interest and applicable fees are expenses; principal reduces the loan liability.
How Do I Account for Buying a Rental Property?
Build the opening entry from the closing statement, then separate basis, financing, escrow, and current expenses.
How Do I Account for the Sale of a Rental Property?
A sale entry removes the property and related depreciation, clears debt, records proceeds, and identifies gain or loss.
How Do I Account for Refinancing and Loan Costs?
A refinance replaces financing; it does not create income or reset the building's depreciable basis.
Expenses and assets
4 guides
Rental Property Repairs vs. Capital Improvements
Repairs generally maintain property, while improvements may better, restore, or adapt it and require capitalization.
How Do I Depreciate a Rental Property?
Depreciation begins with the correct basis, asset classification, and placed-in-service date.
How Do I Allocate Shared Rental Property Expenses?
Choose an allocation driver that reflects how the cost is incurred and retain the calculation.
How Do I Track Expenses by Property and Unit?
Use accounts for the type of expense and dimensions for where the expense belongs.
Tax preparation
2 guides
How Do I Prepare Rental Property Books for Schedule E?
Deliver reconciled property-level records and supporting schedules, not just a list of bank transactions.
What Records Should Landlords Keep?
Keep records that explain each transaction and preserve property basis for as long as it can affect a return.