Reserve Accounts For My Rentals

I am looking to create reserve accounts for my rentals for CAPEX, Vacancy, Repairs, etc. Does anyone know how this can be done?

Comments

  • UKR
    UKR SuperUser ✭✭✭✭✭
    edited September 2018
    I would take a look at "Savings Goals" in Quicken Help. Press the F1 key from anywhere in Quicken to start Quicken Help.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited October 2018
    As an aside, any security deposits that you've received for those rentals should be held in LIABILITY accounts ... they represent money that you owe back to the tenant (subject, of course, to the need to use the deposit for repairs, missed rent, etc.).
    And, I concur with UKR about using Savings Goals.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Unknown
    Unknown Member
    edited July 2018

    As an aside, any security deposits that you've received for those rentals should be held in LIABILITY accounts ... they represent money that you owe back to the tenant (subject, of course, to the need to use the deposit for repairs, missed rent, etc.).
    And, I concur with UKR about using Savings Goals.

    Security deposits are indeed in liability accounts, i am looking to have money in my businesses for expenses such as a new roof, a/c unit, my bank is looking to see those reserves as well.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited July 2018

    As an aside, any security deposits that you've received for those rentals should be held in LIABILITY accounts ... they represent money that you owe back to the tenant (subject, of course, to the need to use the deposit for repairs, missed rent, etc.).
    And, I concur with UKR about using Savings Goals.

    Is your bank expecting to see those  Reserve monies in a separate account?  If so, then Savings Goals won't work ... because they are merely a way to "set aside" money within your main checking account.
    You might need to open  up  an actual account at the bank to hold those reserves.  BUT, within that new account you could use Savings Goals to reflect the various intended purposes  for the funds.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited July 2018

    As an aside, any security deposits that you've received for those rentals should be held in LIABILITY accounts ... they represent money that you owe back to the tenant (subject, of course, to the need to use the deposit for repairs, missed rent, etc.).
    And, I concur with UKR about using Savings Goals.

    "Reserves" in a common and general "accounting" sense are nothing more than debits (increases) is some sort of expense that you see on a P&L e.g., "Change in Reserve for Roof Replacement", and credits (increases) to a some sort of liability Account that you see on a balance sheet, e.g., "[ Reserve for Roof Replacement ]" and if that's what you intend then that's easily done in TurboTax.

    But if that's not what you really want to do and what you really want is "I want to know that I have the actual cash safely tucked away and available" then the best approach is to simply open open distinct savings accounts and transfer money from your general checking account to these other accounts.

    "Savings Goal" mimic this latter approach but without actually moving the money out of checking.  The idea here is that when you look at your balance in the checking Account in Quicken you'll see less money than you really have and, presumably not wanting to go into a negative cash situation, won't spend that money that you can't see.  (Of course the cash actually is in your account with the financial institution, so it's really available to be spent.) 

    When you establish a Saving Goal and "transfer" money into this Savings Goal the amount of cash you see on the Balance Sheet is reduced and the money that was "transferred" shows up in a special section of assets labeled Savings Goals.
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited July 2018

    As an aside, any security deposits that you've received for those rentals should be held in LIABILITY accounts ... they represent money that you owe back to the tenant (subject, of course, to the need to use the deposit for repairs, missed rent, etc.).
    And, I concur with UKR about using Savings Goals.

    Since I can't "edit":  Clearly I meant "that's easily done in Quicken" in the 1st paragraph of my response.
  • Unknown
    Unknown Member
    edited July 2018
    Similar to what Tom just said, I opened a Savings account at my bank and in Quicken I call it an Impound Acct.  I added up my Taxes, Insurance and 5% of Annual Gross Income (Reserves for Capital Improvements) and monthly transfer 1/12 of that amount into my Impound Acct.  Now I never fret when the big bills come in.
  • smayer97
    smayer97 SuperUser, Mac Beta, Canada Beta ✭✭✭✭✭
    edited July 2018

    As an aside, any security deposits that you've received for those rentals should be held in LIABILITY accounts ... they represent money that you owe back to the tenant (subject, of course, to the need to use the deposit for repairs, missed rent, etc.).
    And, I concur with UKR about using Savings Goals.

    (You CAN edit IF no one has Liked your post or posted a reply/comment, as has happened in this case). ;-)
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  • Unknown
    Unknown Member
    edited July 2018

    As an aside, any security deposits that you've received for those rentals should be held in LIABILITY accounts ... they represent money that you owe back to the tenant (subject, of course, to the need to use the deposit for repairs, missed rent, etc.).
    And, I concur with UKR about using Savings Goals.

    1.My bank is looking for 6 months of reserves per LLC (property) to qualify me for more properties.
    2.My understanding is that i can have it on my balance sheet as reserves and not pay taxes as income until it is actually used. 
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited July 2018

    As an aside, any security deposits that you've received for those rentals should be held in LIABILITY accounts ... they represent money that you owe back to the tenant (subject, of course, to the need to use the deposit for repairs, missed rent, etc.).
    And, I concur with UKR about using Savings Goals.

    "1.My bank is looking for 6 months of reserves per LLC (property) to qualify me for more properties."

    I expect the bank wants to see actual cash reserves tucked away someplace.  You should ask if they expect to see the cash segregated - held in a separate account or accounts with some financial institution - or if the cash can be co-mingled with regular "operating" cash. 

    "2.My understanding is that i can have it on my balance sheet as reserves and not pay taxes as income until it is actually used."

    If you're a cash basis taxpayer, which most of us are, then you pay income taxes as income is received in cash, irrespective of how you use that cash.  So if you collect rental income in cash that's a taxable event irrespective of where that cash ends up on your balance sheet.
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