Where landlords and small property managers books go wrong
Rent, late fees, pet fees and security deposits arrive in the same account. When a deposit is booked as rent, income is overstated and the money you owe back to a tenant is forgotten.
Repairs, replacements and improvements are paid the same way but treated differently for tax. Without a description and an invoice on each, the year-end split becomes guesswork.
Managers who collect for several owners need each owner's money traced from tenant to owner payout, with their fee shown as its own line.
Accounts we set up for landlords and small property managers
Your chart of accounts is reviewed during onboarding. These are the lines that usually matter most in this kind of business:
| Account | Why it is separate |
|---|---|
| Rental income, by property or unit | so each building shows its own result |
| Security deposits held | a liability, not income, until the lease ends |
| Late fees and other tenant charges | kept apart from base rent |
| Mortgage interest and principal | split from the lender statement, not lumped as one expense |
| Repairs and maintenance | routine fixes, each with an invoice and a note |
| Improvements | larger work your tax preparer reviews for depreciation |
| Property management fees | for owners who use a manager, or income for managers |
Records the IRS describes
Publication 527 says not to include a security deposit in income when you receive it if you plan to return it to the tenant, and to include any part you keep. Advance rent is included in the year you receive it, whatever period it covers. Source: IRS Publication 527, Residential Rental Property.
For assets, the IRS lists real estate closing statements and purchase invoices with proof of payment. The closing statement for each property is a record to keep for as long as you own it and beyond. Source: IRS: What kind of records should I keep.
Form 1099-MISC lists rents among the payments it reports, and Publication 1099 sets a $2,000 threshold for tax years beginning after 2025. Payments you make to repair contractors may be reportable too; your tax preparer decides. Source: IRS: About Form 1099-MISC.
How long to keep them: the IRS says three years in most cases, longer in some situations, and at least four years for employment tax records (IRS: How long should I keep records?).
Cash through the year
Property taxes, insurance renewals and lease turnovers cluster in a few months of the year. A turnover month often brings a vacancy, a deposit refund and a cleaning or paint bill at the same time.
We show cash by property and a list of deposits held, so you know how much of the balance is truly yours before a large repair.
Contractors, employees and year-end forms
Most landlords pay handymen and contractors rather than employees. Collect a W-9 before the first payment so year-end reporting is straightforward, and keep each invoice with its property.
If you employ a resident manager or maintenance staff, payroll records are employment tax records, which the IRS says to keep for at least four years after the tax is due or paid.
What the monthly service includes
Every month, the same close the bookkeeping page describes: transactions categorized, bank, card and loan balances reconciled to statements, a profit and loss and balance sheet delivered, and a short list of questions instead of guesses. The books stay ready for your tax preparer at year end. For landlords and small property managers, that close also covers:
- Rent received tied to your rent roll, unit by unit
- Deposits held listed by tenant, apart from rent
- Each repair and improvement coded to its property with the invoice attached
Need more than the books? The service levels page describes a monthly review and CFO-style planning on top of the same close.
How remote onboarding works
- Tell us about your books. The short form asks what your books live in today, how many transactions you have a month, how many bank, card and loan accounts, how far behind the books are and what you need. You can ask for a 15-minute call instead of an email reply.
- Written quote and engagement letter. We review what you sent and reply with the scope and monthly price in writing before any work starts.
- Access, without passwords. QuickBooks Online: you invite us as an accountant user. Xero: you invite us with the Advisor role. Excel or Google Sheets: you share the workbook and we send a folder for statements. Nothing yet: we recommend QuickBooks Online or Xero and set it up in your name. You keep ownership and can remove our access.
- Opening balances and a close day. We confirm your accounts, collect recent statements and your prior-year return or financial statements, check opening balances, and agree the day each month's books are delivered.
What helps most for landlords and small property managers:
- Your rent roll or lease list
- Closing statements for each property
- Mortgage statements and the current year's insurance and tax bills
Price
These are the starting prices the quote form uses. Your written scope sets the final price before any work begins.
| Transactions a month | Monthly bookkeeping | Catch-up |
|---|---|---|
| Up to 100 transactions a month | From $450 a month | $300 per month behind |
| 100 to 300 transactions a month | From $750 a month | $450 per month behind |
| 300 to 600 transactions a month | From $1,200 a month | $700 per month behind |
| Over 600 transactions a month | Custom quote | Custom quote |
- 2 bank, card or loan accounts are included; each additional account is $35 a month.
- Books kept in Excel or Google Sheets add $100 a month; starting from nothing adds a one-time $400 software setup.
- Receivables follow-up, with invoice reminders and an aging review, is $100 a month on top of current books.
Prices shown are starting estimates, not quotes.