Should Landlords Use QuickBooks for Rental Property Accounting?

Successfully managing rental properties requires careful financial tracking, and many landlords turn to QuickBooks for their rental property accounting needs. But, while it is a powerful and popular accounting tool, it may not be your best option.

While QuickBooks offers bookkeeping, financial tracking, and reporting tools to manage rental properties, it was never explicitly designed for landlords. As a result, many prefer specialized property management software, like TurboTenant, for their accounting and bookkeeping needs.

In this guide, we’ll compare QuickBooks and TurboTenant to determine which option is best for managing rental property.

Understanding QuickBooks for Rental Properties

QuickBooks has long been known for its powerful suite of financial tools, and as the software has evolved, it has split into two main versions: Desktop and Online.

QuickBooks Desktop is a powerful but often complicated software installed directly on a user’s computer that offers extensive customization options and tools for everything from basic financial tracking to complex business tasks.

QuickBooks Online, on the other hand, lets users access the platform from smartphones, tablets, and e-readers, making it a convenient option for those on the go. While it lacks some of the advanced features of the desktop version, it can still support landlords who manage properties remotely.

Both versions of QuickBooks have tools to help landlords manage rental properties, including tracking rental income and property expenses, managing mortgage accounts for multiple properties, and generating detailed financial reports come tax season.

But does using QuickBooks for rental property make sense for landlords?

Let’s take a closer look.

Challenges of Using QuickBooks for Property Management

While there are some clear benefits to using QuickBooks for rental properties, some significant challenges may arise once real estate investors get under the hood.

Complex Setup Process

Unlike TurboTenant, using QuickBooks for rental property can present a tricky setup process to address the needs of landlords. Because property management isn’t integrated into the QuickBooks functionality, landlords must create individual property profiles to track each property’s finances and cash flow separately.

Tenants would also be classified as “customers” in the system, which has to be done manually and could lead to confusion when running financial reports, especially if a landlord has many rental properties.

Finally, setting up QuickBooks can become even more complicated when aligning a chart of accounts with IRS Form Schedule E and correctly associating expenses with each property, which could lead to even more confusion and time-consuming problem-solving.

Lack of Industry-Specific Features

One of the most significant benefits of using software as a property management assistant is its ability to streamline daily operations, save time, and simplify the role of a property manager.

Because QuickBooks isn’t specifically designed for rental property management, it lacks essential features that landlords rely on. Furthermore, it doesn’t include built-in tools for rental contract management or tenant screening. Plus, it can’t assess late fees for overdue rent or send rent reminders as the due date approaches.

Limited Scalability

For real estate investors, adding rental properties to their portfolio is essential for maximizing profit. As business grows and opportunities arise, incorporating new properties into your workflow should be seamless and hassle-free.

However, adding additional properties in QuickBooks Desktop or Online can be cumbersome and often requires multiple steps to connect all of a landlord’s units. Generating custom reports for a diverse property portfolio can also be tricky, typically requiring extensive customization to get the software to perform as needed.

Introducing TurboTenant as a Specialized Solution

Instead of asking, “Which version of QuickBooks is best for rental property management?” landlords should ask a different question: “How can I make managing rental properties as easy as possible?”

Enter TurboTenant.

What is TurboTenant?

TurboTenant is a thoughtfully designed suite of property management tools designed to address every aspect of managing rental properties and reduce your time behind a screen.

While name recognition might push some landlords towards QuickBooks, TurboTenant’s property management software is specifically designed to manage rental properties, making life easier for landlords and real estate investors alike.

TurboTenant offers a free account option that gives landlords access to essential tools for running a streamlined property management business with minimal setup time and no coding skills required. For those who need more advanced features, a modestly priced premium tier provides additional tools to enhance management capabilities.

Key Features Beneficial to Landlords

Since we’ve established that using QuickBooks for real estate rental properties might not be the best fit, let’s review some key beneficial features for landlords.

Property Marketing

Making sure quality applicants see your listings where they’re already browsing is imperative to minimizing vacancies and keeping your units full of quality tenants. TurboTenant syndicates property listings to dozens of top-tier listing sites for free with just one click.

Tenant Screening

Once you’ve received an online rental application, you’ll need to conduct tenant screening by reviewing an applicant’s credit, criminal, rental, and eviction history. TurboTenant provides landlords with a comprehensive review of a tenant’s background and directly passes the service cost to the applicant.

Online Rent Collection

One of the core, industry-specific features of property management software is the ability for landlords to collect rent online. TurboTenant allows tenants to pay rent through the platform via ACH, debit, and credit cards. It automatically sends rent reminders, assesses late fees if rent is late, and integrates seamlessly with business bank accounts.

Accounting and Reporting

Thanks to its integrated REI Hub software, TurboTenant makes tracking rental income and expenses easier than ever across all your properties. Landlords can generate custom reports for tax season; monitor daily, monthly, and yearly cash flow for individual units or an entire portfolio; and manage everything from a single, easy-to-access platform.

Tenant and Lease Management

Unlike QuickBooks, TurboTenant recognizes tenants as more than just “customers.” They are residents with whom landlords build long-term relationships, and keeping them satisfied contributes to the stability every landlord values when filling units.

TurboTenant also allows users to access online lease agreement templates that comply with landlord-tenant laws and sign them electronically for a seamless rental process.

Comparing QuickBooks and TurboTenant

When choosing between QuickBooks for rental property management and specialized software like TurboTenant, landlords should consider key factors such as ease of use, essential features, and cost-effectiveness.

Ease of Use

QuickBooks

While QuickBooks has long been an industry leader for business accounting, it has a steep learning curve for landlords. It requires advanced knowledge to customize its built-in features for ideal property management utilization.

Due to its heavy lean towards purely business accounting, landlords must find creative ways to bend QuickBooks into a property management utility.

TurboTenant

TurboTenant was built from the ground up to cater directly to landlords and property managers, with an easy-to-use suite of user-friendly, incredibly intuitive tools tailored specifically for landlords.

Its features include pre-built templates, communication tools, powerful tracking and maintenance options, and an active community forum. Unlike QuickBooks, TurboTenant requires no advanced setup or customization, making it a stress-free solution regardless of portfolio size.

Features

QuickBooks

At first glance, using QuickBooks for rental property might seem to make sense. After all, it offers valuable accounting and financial tracking tools, including income and expense tracking, mortgage payment management, and tax reporting, with minimal need for reconfiguring.

However, it lacks rental-specific features that landlords need to manage properties effectively, especially for those with medium and large portfolios. Even landlords with just one or two properties may find that QuickBooks lacks several key features they desire.

TurboTenant

Beyond a robust set of rental property accounting features, TurboTenant boasts plentiful tools that provide landlords with everything they need to streamline their day-to-day operations, including tenant screening, lease tracking, maintenance management, tenant communication, and more.

By creating software specifically designed for property management, TurboTenant provides a streamlined solution optimized for success.

Cost Considerations

QuickBooks

QuickBooks uses a subscription-based pricing model and offers monthly or discounted annual plans, which start at around $35 per month but can swell to over $200 per month.

Additionally, some landlord-friendly add-ons cost extra on top of the subscription fee, potentially making the software unaffordable for some.

TurboTenant

TurboTenant, built specifically for landlords, offers users a free tier with many core features that landlords need to level up their property management game. For free, you can market your properties on dozens of syndicated listing sites, collect rent online, screen tenants, collect rental applications, and more.

The platform does offer some premium services for an additional fee, but the core tools needed to manage property effectively are included at no charge.

When you break it all down, it’s easy to see why TurboTenant is the go-to property management software for hundreds of thousands of landlords nationwide.

The Final Word

QuickBooks is a widely used accounting software that thrives in many aspects of business finance. It’s a serviceable tool for tax preparation, expense and income tracking, and integrating with bank accounts and other software.

But, while it’s rightfully an industry leader for pure accounting needs, QuickBooks may not be an ideal solution for managing rental properties.

TurboTenant, on the other hand, streamlines property management tasks with state-specific lease agreements, online rent collection with rent reminders and automatic late fee inclusion, rental applications, comprehensive tenant screenings, and one-click rental advertising.

So, while QuickBooks might not be the best fit for your portfoilio, don’t let another day pass without seeing what property management software can bring to the table.

Sign up for a free TurboTenant account today and immediately level up your rental game.