What Rental Property Accounting Software Is Right For You?

If you’re one of the many landlords and property managers preparing for tax season, you’re probably searching for the easiest way to organize your business’ finances. You’ll want to be ready when the time comes to report your income and file your taxes. Perhaps you’ve stumbled upon online real estate rental accounting software and you’re looking to purchase a subscription, but you don’t know where to start picking one that’s right for you.

We’ve built a list of considerations to keep in mind when searching for the best accounting software for real estate investors so you can find the software that works best for you and your rental properties.

What is Rental Accounting Software?

Before learning about which software best aligns with your needs, it’s important to have a basic understanding of what rental accounting software is. Landlord accounting software is different from other accounting software on the market because it’s designed specifically for landlords and real estate investors. Rental accounting software offers features built for the landlord experience, such as income and expense tracking, report generation, and property/tenant organization.

Implementing rental property accounting software into your business can lighten the responsibility of bookkeeping by automating and simplifying your accounting needs, adding endless value to your business’ finances.

Important Considerations When Choosing Real Estate Rental Accounting Software

When it comes down to it, not all real estate accounting software is the same. Some platforms offer a larger number of helpful features (or features that are most important to you) than others, some are more affordable than others, and some simply have a better reputation than others. It can be difficult to know what to look for when perusing rental property accounting software.

Let’s take a look at some tips and tricks for finding the best rental property accounting software for small landlords and large landlords alike.

Consider Differences in Cost

The first and often most important aspect of choosing rental accounting software is the price tag. It’s important to compare the prices of various software options to find a solution that fits your budget and your business. Some software has more features to offer but comes with a higher monthly or yearly premium as a result. Other software is more affordable but does less of the heavy lifting of managing your finances.

Both options have their benefits—the “better” option depends on your needs. If you’re a landlord with 500 units, you’ll need more involved software that can handle in-depth income, expenses, real-time reports, and bank accounts for each unit. This means you’ll likely need more expensive software. If you’re a landlord with 50 units, however, your needs may be much more limited, and opting for basic rental accounting software will keep you from paying for features you don’t need or won’t use.

Usability

The odds are that if you’re a landlord, you likely aren’t an expert in accounting. That’s why usability is important when choosing real estate accounting software. When perusing options online, you should search for a platform that you feel comfortable operating or learning how to use. Are you tech-savvy? Do you prefer straightforward software or something with extra bells and whistles to experiment with?

If a specific software is frustrating to navigate and understand, it may not be right for you. Some software is built with simplicity and beginner-friendliness in mind, so don’t let software that requires a high skill level prevent you from managing your books.

Integration Options

Another factor to consider in potential landlord accounting software is integration options. Every software offers different features, but two of the most valuable are integration with a bank or with rental property management software.

Integration with a bank allows you to connect a bank account to your software for further accounting automation. For example, let’s say you spend $30 on a can of paint to touch up a wall in one of your properties. With rental property accounting software, you won’t need to manually enter that payment for your income and expense tracking. The software will automatically import that record from your monthly bank statement so you can keep up-to-date, accurate books.

Additionally, integration with property management software offers total control and organization of your rental business. Any income and expenses you may encounter in your property management software can be synced with your accounting software. This means that application fees, security deposits, monthly rent payments, utility expenses, lease and document management, and more can be easily tracked and managed along with tenant information.

Types of Features Offered

Another factor you should research before choosing your rental property accounting software is the types of features offered. As mentioned above, some software offers robust features while other software is straightforward and simple. The specific features advertised can range from in-depth Schedule E and profit & loss reporting to simple income and expense calculations. The features that make one platform stand out to you from similar competitors will give you an idea of the software you should choose.

Some common features to keep an eye out for include integration with bank accounts and property management tools (as mentioned above), credit card processing, online rent collection, receipt/invoice tracking, report creation, tax form generation, and standard income and expense monitoring. With automation for many of these features, you’ll be able to relax knowing that you’re mitigating the number of human (and potentially costly) errors in your financial management.

Security

Finally, you should always make safety and security a priority when choosing landlord accounting software. Accounting as a landlord means handling sensitive financial information for both property managers and tenants, so keeping every party’s information safe is a top priority. Unsafe accounting software can have serious consequences—always research what security features or measures a company offers with their software. If you can’t find a good answer, another software may be a better, more reliable choice for you.

Conclusion

Rental property accounting software is a valuable addition to your business that can ease much of the burden of manual bookkeeping or financial tracking and make filing taxes a breeze. When choosing a platform, look for software that offers free trial periods (such as Ledgre) so you can get a better idea of how it works and if you want to continue using it. The property management accounting software you choose is ultimately up to you, but we hope these tips on features to look for are a good foundation for your search.