Best Practices for tracking Rental Properties in Quicken Classic for Mac

t34hansen

I switched over from Quicken Windows to Quicken Mac for ~1 year ago. My justification for using Quicken is mainly for tracking income/expenses for my personal owned rental business (meaning I own the properties directly vs. owning an LLC that owns the properties). Of course, since I have Quicken I also use it for my personal finances. At the time I made the decision to switch I knew QMac had less support for tracking the rental business than QWin but after trying out QMac I thought it had sufficient support for handling what I needed. I made the switch and do not regret.

In QWin I had assigned a tag to each property. When I transferred my data to the Mac world I assigned a business name to each property and got rid of the tag. Now I'm no longer sure this was a smart move. Does it have ramifications when you generate a report (or is that solely controlled by categories)? And so on?

I wonder what other folks' experiences are? Do you use one business entity per rental? One business entity for all properties plus tags? Or do you just tag you properties and don't use the business entity feature in QMac? What are the pros & cons for the different possible ways of tracking a rental property business? Best practices?

Quicken Kristina

Hello @t34hansen,

To better address your question about whether removing the tags has any ramifications when you run reports, would you please specify which reports you use? I would expect the category to have more impact on what would show up on a report, in most instances.

With the business features being relatively new, there isn't a lot of guidance on best practices yet. According to our help article on setting up businesses, when setting up a business for rental properties, you would want to select Rental Property Owner for the business type.

Since rental property income and expenses are typically under Schedule E for taxes, it's a good idea to make sure you're assigning Schedule E Tax line items to the Categories you're using with your rental property transactions. Doing this will help ensure the correct information shows up on reports. To edit categories, or create new categories, you can navigate to Window>Categories. If a tax form and tax line are assigned to a category, you will see it in the Tax Form and Tax Line columns. You can click the + sign in the lower left corner of the window to create a new category, the pencil icon near the lower left to edit the selected category, or the - sign near the lower left to delete the selected category.

What structure you use depends on what works best for your specific situation. For example, if you have multi-unit rental properties, it may make sense for each property to be it's own business and the individual tenants to be listed as clients. If your rental properties are not multi-unit (eg single family homes), then it may make more sense to have one business and each property listed as a client.

I hope this helps!

MontanaKarl

Hi @t34hansen ,

As the business features of QMac are pretty new and will continue to be fleshed out, what may be the best approach today may not be the best approach a year from now, should QMac get the rental property features of QWin (which tracks multi-unit rentals and tenants).

The good news is that, as you probably have discovered, QMac makes it relatively easy to reorganize (recategorize, retag, etc) transactions… other than split transactions (a long term feature request).

You begin by saying you own the properties directly vs via an LLC. Do note that a single member LLC (you) typically files the same as an individual - on a Schedule E (or C or F) on your personal 1040. You have to elect to file in other ways. An LLC does offer you some liability protection and I encourage you to look into that option, consulting an attorney to go over the benefits if Goggle doesn't help enough. (Depending on your state, if you decide to form an LLC, it can be as easy as filing with your Secretary of State and paying a small filing fee.)

Similar to Quicken Kristina's response - I encourage you to look at your transaction organization in terms of what will most easily provide the data required for Schedule E. Schedule E allows for showing the numbers for up to 3 properties…with additional Schedules E added to cover all properties (e.g., a building at an address regardless of number of units) … and the totals across all properties listed on only one copy of Schedule E.

Thus, your idea of a business-per-property, with all properties using the same categories seems to be the best bet. This allows you to generate income statements per property (filter report by one business - and memorize)… and the summary of all properties (filter by all businesses that are rental properties).

If you have multi-unit properties, you could use Tags for that - using the same tags across all businesses. E.g., Unit A, Unit B etc. Or you could have tags that are more specific to each property so that reports showing tags are more meaningful to you or a tenant. That would allow you to filter your registers or reports more easily.

Obviously with today's features, Clients would be your Tenants. But, unlike QWin, there is no way to lock in the association of a Client with a specific property or unit for invoicing and tracking rent receivable. You'd have to set that up via Products and Services - which would add to clutter with an entry for ever rentable unit - and potential error as you have to make sure that you only generate an invoice for a rental unit that belongs to the Business associated with that Invoice. (QMac has no mechanism to associate a given Product/Service with a particlar Business which I find a major potential source of user error.)

Finally - you cannot (today) generate any reports like the current "Cross Tab" reports - which would allow you to generate a Cash Flow or Income statement for a rental property with columns for each unit (Tag). Business reports do not allow that. You would have to generate a separate filtered business report for each unit and assemble the results in Excel / Numbers after copying the report data from QMac's "Export" button. This is a huge missed feature for me.

Hope that helps (and that I don't have too many autocorrect typos above) ;-)