If you are using QuickBooks to manage your real estate business, this is something you may have encountered and wondered about. Setting up accounts and associating data with the correct account is vital for saving you time and keeping your financials running smoothly. Take a peek at the answer we provided one of our clients recently regarding recording property value.
Q: Under which account do I record a real estate property’s value or the property’s loan balance?
A: The Chart of Accounts is the backbone of your accounting system. That is why it is so important to set up the Chart of Accounts correctly and that you enter property value and loans under the correct account in QuickBooks. Record your real estate purchase under one of the following accounts:
- A purchase price, settlement charge, loan cost, or improvement cost should be entered as a Fixed Asset
- A loan should be entered as a Long Term Liability
To set up your Chart of Accounts with one or more of these accounts as new, click on Lists > Chart of Accounts > CTRL N.
For more information on setting up a proper Chart of Accounts in QuickBooks, refer to our post, QuickBooks Chart of Accounts for Landlord Rentals, Residential, and Multi-Unit Properties.