Managing finances in the real estate industry can be complex. With multiple properties, diverse income streams, fluctuating expenses, and numerous stakeholders, having an efficient bookkeeping and accounting system is crucial. Fortunately, the right software can streamline these processes, making your financial management easier, faster, and more accurate. This guide will walk you through some of the top software solutions for real estate bookkeeping and accounting, helping you make an informed decision on which one best suits your needs.
Why is Real Estate Bookkeeping and Accounting Different?
Real estate bookkeeping services isn’t just about tracking income and expenses. It involves handling unique aspects like property management, tenant billing, lease agreements, maintenance costs, and tax deductions. The software you choose must be capable of handling these complexities while ensuring compliance with industry regulations and providing accurate financial insights.
Here are some key features to look for in real estate accounting software:
- Property-specific tracking: Ability to manage finances for multiple properties.
- Automated invoicing and billing: Generate and track rental income and expenses automatically.
- Tax integration: Simplifies tax calculations and deductions specific to real estate, such as depreciation.
- Reporting and analytics: Generate detailed financial reports that help with investment decisions and tax filing.
QuickBooks Online: The All-Around Favorite
Best for: Small to medium-sized real estate businesses
QuickBooks is one of the most widely used accounting tools across various industries, and it does an excellent job for real estate accounting as well. It allows real estate professionals to track income and expenses, manage accounts payable and receivable, and generate detailed financial reports.
Key Features:
Multiple account tracking: Track financials across several properties and clients.
Integration with third-party apps: Connects with property management tools, payment processors, and even tax software like TurboTax.
Real-time collaboration: You can invite your accountant or team members to collaborate, ensuring a streamlined workflow.
Customizable reports: Tailor reports to your specific real estate needs, such as profit and loss by property or income by tenant.
Pros:
Easy to use and beginner-friendly.
Offers a real estate-specific chart of accounts.
Mobile app for managing finances on the go.
Cons:
Limited advanced real estate features compared to specialized software.
Can be expensive for larger companies or those with many properties.
Buildium: A Property Management and Accounting Powerhouse
Best for: Property managers and real estate investors with large portfolios
Buildium is a property management software that combines bookkeeping and accounting functionalities tailored specifically to real estate. It’s ideal for property managers, landlords, and real estate investors who need to manage not just finances, but also leases, tenants, and maintenance requests.
Key Features:
Tenant and lease tracking: Manage rent payments, leases, and expenses specific to each property.
Automated invoicing: Automatically generate and send invoices to tenants for rent, utilities, and other charges.
Owner statements: Provide owners with detailed financial reports, including income, expenses, and net profit.
Tax filing and deductions: Helps with tax reporting and ensures you’re taking advantage of all real estate-related deductions.
Pros:
Specialized for property management and real estate accounting.
Allows communication with tenants for rent collection and maintenance requests.
Scalable for companies of all sizes.
Cons:
The learning curve can be steep for beginners.
The pricing can be higher compared to other basic accounting tools.
Xero: The Scalable, Cloud-Based Solution
Best for: Growing real estate firms or businesses looking for scalability
Xero is a powerful, cloud-based accounting software that is known for its scalability and ease of use. While it’s often preferred by small businesses, it has advanced enough features to cater to larger real estate businesses as well.
Key Features:
Real-time financial tracking: Monitor cash flow, income, and expenses across multiple properties in real time.
Fixed asset management: Useful for tracking the depreciation of real estate assets over time.
Integrations: Seamlessly integrates with various third-party apps, including property management tools and CRM systems.
Multi-currency support: Ideal for real estate businesses with international clients or properties in different regions.
Pros:
User-friendly interface with cloud-based access.
Extensive reporting options to help with decision-making.
Integration with a wide range of other software.
Cons:
Limited reporting templates specifically for real estate.
Can become pricey as you scale.
FreshBooks: Top Choice for Airbnb Host Accounting Software
Pricing: $19/month for the base account (30-day free trial available). ($7.60/month under current promotion for the first six months)
Free Version: 30-Day Free Trial
Supported: iOS, Android, Windows, Mac
Learn More Best Feature: Unlike many of the other software on this list, FreshBooks has everything you will need for your real estate accounting.
It enables companies to concentrate on time-saving and expediting payment procedures.
This software’s effectiveness in expense sorting, client administration, and a variety of payment alternatives is the reason it is ranked second on our list.
Key Features:
Time Entry Specifics: FreshBooks’ ability to measure the amount of time you’ve spent on each project, call, or customer is one of its many wonderful features. Giving your company a clear understanding of how well your staff is performing.
Personalized Estimates: To enhance client communication while handling sales or rental properties, you may generate personalized estimates in FreshBooks by utilizing pre-made templates.
Reminders and Late Payment Fees: The program enables landlords to track late payments from their renters and provides a way to send them reminders. As a result, it drastically cuts down on the physical labor required to pursue payments.
Pricing: Four plans are available from FreshBooks for micro- to small-sized businesses. These consist of:
Lite: $19 monthly billing (currently available as a promotion of $7.60/month). It permits sending five clients a limitless number of invoices.
Plus: $33 monthly billing (currently available as a deal for $13.20/month). Sending an infinite number of bills to up to 50 clients is permitted.
Premium: $60 monthly billing (currently available as a deal at $24/month). It permits you to send an infinite number of bills to any number of clients.
Choose: In addition, FreshBooks offers a customizable plan that lets you work with an expert to alter the features to your preference.
Advantages: exceptionally low plans compared to other software
- a) Monitoring sales taxes
- c) Personalized invoices
- b) Comprehensive financial disclosure
- g) Options for immediate payment acceptance.
Disadvantages
- a) Few customers in the most economical plans
- b) Absence of a customer portal
- c) The cost of adding a team member increases each month.
AppFolio: The Ultimate Property Management Suite
Prices start at $280 a month.
Free Version: Free Demo; additional costs apply.
Platforms supported: Mac, iOS, Android, and desktop
AppFolio is another excellent choice for the finest accounting software for real estate owners if you manage a sizable rental portfolio. It includes every feature you might want in a property management software program. Alright, so perhaps that was a little too dramatic. Real estate developers may handle online leasing, automated payments, and maintenance requests all in one handy place by using AppFolio.
Key Features:
AppFolio: This feature is what makes AppFolio the top choice of many for different types of properties. From community associations to commercial real estate landlords, the software is priced for their specific requirements.
Top Accounting Features: Offering a wealth of useful real estate accounting tools, AppFolio ensures that investors have access to everything they need for their financial management.
User-Friendly Design: Software made to ensure that there are no learning curves and all interactions feel natural between residents and investors
Integration Features: If you are using this for customer service, it was always very important to have seamless integrations. The AppFolio Stack Marketplace offers top-of-the-line integrations for property investors to power their own tech stack.
Pricing:
AppFolio provides its services through three distinct programs that are tailored to meet the needs of businesses and include affordable, single-family, and multifamily homes. The plans are as follows:
- Core: Spend at least $280 a month, which works out to $1.40 per unit a month. This plan includes property accounting and reports, end-to-end marketing and leasing, etc.
- Plus: $900 minimum spend per month, which means $3 per unit per month. This plan includes everything available in the Core plan plus AppFolio Stack™ Premium Integrations, purchase orders & inventory tracking, and more.
- Maximum: $7500 each month, which equates to $5 per unit.
Plus plan features are included in this plan, along with extras like custom fields, leasing CRM, and leasing signs.
Advantages
- a) Regular additions of constant features
- b) Common property function features for all properties
- c) Schedule and pay vendors easily.
- d) Batch invoicing
- e) Excellent customer service
Disadvantages
- a) It does not have any specialized pricing packages for individual non-institutional landlord properties.
- b) High minimum monthly fee
- c) Not suitable for small portfolio sizes
Conclusion
Too often, people refer to software as the solution, but in reality, it’s just a tool that, with proper setup and maintenance, can enhance efficiency. Expert advice can assist you in avoiding numerous pitfalls. The process of real estate isn’t only about purchasing or selling properties; it’s also about handling your transactions well, understanding the financial upturns and downturns, and ensuring that for every deal you close, you’re one step closer to another successful closing. And, alongside the right tools in your tech arsenal, you’re not just building homes or closing sales; you’re building a legacy.
Author Bio:Velan bookkeeping, with 18 years of experience as an outsourced bookkeeping services provider, offers cloud accounting and bookkeeping, AR/AP, payroll, and controller services for various industry verticals. We cater to all types of clients, right from small businesses and CPA firms to Fortune 500 companies spread across the USA.
