In short

Real estate bookkeeping is organised by property. Rent rolls and tenant ledgers are reconciled to deposits, security deposits are held as liabilities, mortgage payments are split into principal, interest and escrow, repairs are separated from improvements, and property management statements are recorded line by line, so each property shows its own income, expenses and cash flow. Late fees, utility rebills and pet fees are recorded as separate income lines per property.

Whether you own a handful of rentals or manage a growing portfolio, the books need to answer one question clearly: how is each property doing? Real estate bookkeeping is organised around properties, units and tenants rather than one combined profit and loss.

Property-level ledgers

Each property gets its own class or location in the books. Rent, fees, repairs, utilities, insurance, property tax and management fees are coded to the property they belong to. Shared costs such as software or accounting fees are kept separate or allocated by an agreed method.

Rent and tenant balances

We reconcile the rent roll or tenant ledger to the bank each month: who paid, who is behind, and which deposits were partial payments or late fees. Security deposits are not income; they are held as a liability until returned or applied.

Mortgages and escrow

A mortgage payment usually combines principal, interest and an escrow amount for taxes and insurance. Recording the whole payment as an expense overstates costs. We split each payment using the lender statement, so interest is an expense, principal reduces the loan balance and escrow is tracked as an asset until the lender pays the bills.

Repairs or improvements

Fixing a leak is different from replacing a roof. Improvements are generally capitalised and depreciated; the IRS explains this in Publication 946. We keep invoices and descriptions so the right treatment can be applied.

Property manager statements

If a manager collects rent for you, their monthly statement is the source document. We record gross rent, each expense and the manager's fee, then the net distribution to your bank, instead of just the deposit.

Monthly output

  • Profit and loss by property
  • Rent roll reconciliation and arrears list
  • Loan balances agreed to lender statements
  • Security deposit liability by tenant

See how we work with real estate businesses, our bookkeeping services, or book a consultation.