5 Best Bookkeeping Software for Rental Property

Landlords and property managers often struggle with manually managing finances across multiple properties. How can you tell if your property is truly profitable after accounting for all expenses?

A key part of financial management is accurately calculating cash flow. That’s where accounting tools step in. These tools take the burden off your shoulders, helping you manage income more efficiently and predict results with greater accuracy.

Real estate investors can benefit greatly from automating rental property income and expense tracking using tools that simplify tax preparation and generate detailed financial reports. Property management doesn’t have to be as complicated as it seems.

In this article, we’ve put together a list of the best accounting software for rental property management to help you find the solution that fits your needs.

Why Do I Need Rental Property Accounting Software?

One of the most common challenges rental property owners face is keeping accurate records of all income and expenses, especially when managing multiple properties. Without the right accounting tool, it’s easy to miss expenses, forget to record payments, or lose track of maintenance costs, which can lead to poor financial decisions and potential tax issues.

The problem with manual data entry and spreadsheets is that it can easily cause confusion and chaos. If rental income is not accurately tracked, owners might underreport their earnings, which could cause potential audits or penalties from the IRS.

The opposite is also true: Property owners are eligible for various deductions. Inaccurate record-keeping can lead to missing out on these deductions, and increased tax liability.

Dedicated accounting software helps property owners organize financial data and automatically track income and expenses for each property, making it easier to monitor the financial performance of individual units. It also allows you to link multiple bank accounts and credit card accounts, automating many transactions.

But do you still need an accountant? Having a tax professional on your side who knows local tax laws—especially one with experience in the rental property business—can be invaluable. However, not everyone can afford or is in a position to hire a personal accountant.

The good news is that some accounting software options are designed to be simple and intuitive, making it easier for the average user to manage their finances independently.

How Do I Choose the Right Rental Property Bookkeeping Software

A property manager choosing a rental property accounting software must take into consideration a few things.

First off, check out all the features and functionalities. The software should cover your needs as a rental property owner, from basic accounting features to tracking property performance and generating financial reports. Key functions of any accounting software include income and expense tracking, and you should be able to oversee online rent payments (or short-term stay payments), and maintenance costs.

Next, a user-friendly interface would be a plus. Accounting software is effective if you can navigate the program also without having accounting experience. Some accounting software is more complex than others, which isn’t such a problem for accounting professionals, but if you are doing it all by yourself look for a more intuitive option.

Choose a property accounting solution that fits your budget. Monthly subscriptions can be as low as $11-$16, and also $100/month. The key is to strike a balance between the price and features.

Then, think of scalability. Can this tool support multiple units with the basic plan, or do you need to subscribe to a higher pricing tier to manage unlimited rental properties?

When you’re picking accounting software, make sure it can smoothly connect with your bank. Look for features that let you automatically import transactions and handle reconciliation.

Use the right accounting tool to keep your rental property finances in order, add here’s a list of tried and true solutions for landlords and property managers.

Best Bookkeeping Software for Rental Properties

Effective property management starts with financial tracking. Here are some of the key features rental property accounting software should have:

• Income and expense tracking (rent payments, nightly booking payments, maintenance cost tracking)
• Financial reports, the functionality to generate income statements, and cash flow analysis
• Tax preparation tools
• Support for managing multiple properties and multiple bank accounts

Here are the best rental property accounting software that landlords and property managers use daily, top features, and some of the pros and cons as reported by users.

The following solutions made our list:

1. QuickBooks Online
2. Wave Accounting
3. Xero
4. Sage Intacct
5. REI Hub

1. QuickBooks Online

Industry-standard solution QuickBooks is suitable for small, medium to large businesses with more complex needs. With this software, you’ll find robust accounting features that cover practically everything you need. Create customizable invoices, track expenses, assign classes to categorize expenses by property.

Users can easily track income and expenses associated with each property, and this accounting software also supports multiple currencies. You can choose from four pricing tiers, with the cheapest starting at $35/month or approximately $27/month with an annual plan (USA).

However, if you want features like bill and payment management, adding more users or sales channels, inventory tracking, and recurring transactions and bills, you’ll need to opt for higher tiers. When you sign up, you’ll get 50% off for the first three months.

Key Features

• Full general ledger accounting and financial tracking.
• Robust expense tracking capabilities, allowing users to categorize expenses related to each property.
• Set up recurring invoices for regular payments.
• Organize income and expenses into tax categories.
• Photograph and upload receipts using the mobile app.
• Generate a variety of financial reports, such as profit and loss statements, balance sheets, and cash flow reports.
• Manage transactions in multiple currencies.
• Payroll management.
• Sync bank accounts and credit cards to automatically import transactions.
• Built-in tax forms and compliance tracking for accurate filings, including 1099 preparation.

Pros and Cons

Pros:

• Easily track income and expenses for each property
• Robust set of accounting features
• Rich in advice and tutorials for troubleshooting

Cons:

• Steeper learning curve due to the complexity of accounting features
• May require professional help to set up QuickBooks for rental properties
• Not the most budget-friendly accounting software option

2. Wave Accounting

Wave is a popular free solution for small businesses, which is why it’s on this list. Even if you decide to upgrade to a paid version, it’s still one of the most affordable options on the market at $16 per month. Property owners just starting out get quite a lot of features for free: unlimited invoicing and billing, bank connections and transactions, accounting overview dashboards.

Wave has a double-entry accounting system, ensuring accurate financial reporting. On the flip side, it won’t work for you if you live outside the USA or Canada, as it’s designed for these markets and only allows you to select USD or CAD as your business currency.

Key Features

• Create unlimited estimates, invoices, bills, and bookkeeping records.
• Unlimited bank and credit card connections.
• Industry-standard double-entry accounting software.
• Small business payroll to pay employees and contractors.
• Automatically import, merge, and categorize your bank transactions.
• Easy for non-accountants to navigate the program.
• In-house accounting and payroll coaches and bookkeepers support on-demand for an additional fee.

Pros and Cons

Pros:

• Free plan includes unlimited invoicing, expense tracking, and basic bookkeeping features
• Easy-to-use, intuitive interface
• Landlords can send unlimited invoices and manage multiple businesses under one account

Cons:

• Available only in the US and Canada
• Limited accounting functionality compared to more robust solutions
• Primarily designed for small businesses and freelancers, not suitable for scaling a business

3. Xero

Xero enables landlords to easily track revenue and costs for each rental property. Designed for small businesses and accountants, the software allows landlords to collect rent, record maintenance costs, pay bills, manage vendor payments, and perform bank reconciliations.

As of October 2024, the pricing will be $20/month for the basic plan and $47/month for the growing plan in the US market. While it may not be the cheapest option available anymore, Xero offers a robust accounting system and continuously updates its features.

Xero provides a solid mobile app that is particularly beneficial for rental owners who need to manage their accounts while on the go.

Key Features

• Track rent payments, security deposits and expenses to help show the ROI across your property portfolio.
• Robust invoicing capabilities, including automatic reminders and the ability to create recurring invoices.
• Track and pay bills.
• Multi-currency accounting.
• Make expense claims, take a photo of your receipt.
• Set up a new organization file for each rental property.
• Manage and share documents, contracts, bills and receipts digitally.
• Xero’s mobile app to access data from anywhere.
• Add tenants as contacts, properties as fixed assets.
• Calculate taxes and deductions.
• Connect with your bank (collaborate with over 21,000 financial institutions globally).

Pros and Cons

Pros:

• Designed for small and medium businesses
• Supports scalability; you can upgrade to higher plans as your portfolio grows
• Suitable for vacation rental businesses with the ability to track multiple properties and income streams

Cons:

• The starter plan is limited to sending 20 invoices and entering 5 bills
• Prices have increased over time, so it’s no longer one of the most affordable options available

4. Sage Intacct

This cloud-based solution is designed for growing businesses that require a highly scalable and customizable accounting system. As a result, training may be necessary to fully leverage its capabilities, and having an accountant who is familiar with the system can be a good idea.

Real estate investors will particularly benefit from this accounting software, as it offers real-time data analytics to support informed decision-making. It’s a versatile tool that provides highly customizable reports and can integrate with practically any third-party software.

Regarding pricing, the company offers custom quotes tailored to each business, so you’ll need to reach out to them directly for a quote.

Key Features

• Advanced accounting and ERP capabilities.
• Financial planning, budgeting, and forecasting.
• Analytics and data visualization.
• Payroll and HR management.
• Multi-entity and global consolidations.
• Revenue recognition and contract management.
• Project accounting and professional services automation.
• Fixed asset management.
• Lease accounting compliance.
• Sales and use tax management.
• Time and expense tracking.
• Vendor payment automation.

Pros and Cons

Pros:

• Suitable for larger businesses
• Highly scalable solution that can grow with your business
• Flexible and customizable to meet your specific industry needs

Cons:

• Expensive for small businesses

5. REI Hub

This accounting tool is designed specifically for rental property owners, property managers, and real estate investors. Founded in 2018, REI Hub is a young company offering an industry-specific accounting solution for landlords of single-family and multi-family units, as well as short-term rentals. If you’re tired of using spreadsheets and want to explore a tailored solution, consider trying out REI Hub. They offer a 14-day free trial.

The software uses a double-entry accounting system, allowing you to generate organized reports by property and unit. It can produce all major reports, from profit and loss statements to balance sheets. Their pricing structure is based on the number of units, starting at $15/month for up to three units.

Key Features

• Income and expense tracking.
• Transaction feeds from linked bank accounts.
• Performance reports segmented by portfolio, property or unit.
• Net income, cash flow, and balance sheet reports.
• Schedule E exports.
• Automated mortgage accounting.
• Cash on cash, NOI, and more real estate metrics.
• Vendor tracking for 1099 reports.

Pros and Cons

Pros:

• Industry-specific tool for rental property accounting
• User-friendly and tailored to property owners
• Affordable solution, especially for owners with up to three units

Cons:

• Focused on the US market

Alternative Accounting Tools Worth Considering

There are other alternatives that could handle your rental financial management. Some of these are lesser-known solutions that cater to small businesses or offer rental property management-specific features.

Let’s add a few honorable mentions:

Rental Hero is an industry-specific accounting software designed for property managers without an accounting background. It offers basic features covering invoicing and accounting for rental properties and is quite affordable at $10.75 per month. It’s available in the USA and Canada.

Instabooks is worth mentioning because this solution is geared toward small businesses in various industries, including Airbnb hosts. They claim to be Airbnb and real estate tax accounting software capable of managing your real estate and Airbnb expenses and income. Their pricing plan starts at $15 per month if billed annually or $20 per month if billed monthly.

Zoho Books is part of Zoho One, an integrated suite that includes over 40 applications designed to manage various business functions. It’s an Indian-based company, perhaps not as widely known as some competitors, but it boasts high ratings on software review platforms. It’s interesting because it has a wide set of accounting features and financial reports, plus a free starting plan for solopreneurs and micro-businesses.

What Do I Need to Know about Vacation Rental Accounting

First-time property managers find themselves overwhelmed with questions daily. Don’t let the paperwork involved in the rental business hold you back.

Let’s clear up a few things.

First things first, establish a separate bank account for your property management business. Mixing personal and business transactions complicates tax preparation and leads to confusion.

When tax time comes around, have all your documents and data organized. This is where accounting tools come in handy, as they can generate important documents like income statements, net cash flow statements, and facilitate tax filing with built-in tax preparation tools.

Many new managers worry about filing taxes and handling forms. The 1099-K form, for example, reports the gross amount of payments received for bookings, including the total before fees are deducted (e.g., platform fees, cleaning costs, utility bills). It’s important to calculate if your property is actually profitable after accounting for all expenses.

Accounting software simplifies the process of tracking expenses. As a property owner, you need to track every single expense, from utilities to soap and toiletries. Don’t forget maintenance, repairs, and cleaning services—all expenses related to guest satisfaction are deductible.

Rental owners are entitled to tax deductions on rental expenses. It means you need to keep all receipts for property purchases, maintenance, repairs, and even travel expenses related to property management.

Here’s a list of common deductible expenses:

• Rent and rental commissions
• Professional cleaning services
• Supplies and furnishings
• Repairs, maintenance, and tools
• Property upgrades and refurbishments
• Utility payments
• Insurance payments
• Mortgage interest
• Marketing costs
• Subscriptions

Next, while you can use your vacation rental for personal purposes, there are tax implications. According to the IRS:

“If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You’re considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for a number of days that’s more than the greater of:

• 14 days, or
• 10% of the total days you rent it to others at a fair rental price.”

In short, if you use the property for personal reasons for more than 14 days or 10% of the days it’s rented, the IRS considers it a personal residence, limiting the rental expenses you can deduct.

If your personal use exceeds the limit, you can still deduct rental expenses, but only for the proportion of time the property was rented. You’ll need to divide your expenses between personal and rental use.

So, if you plan to use the property yourself, make sure to stay within the limits or be prepared to split deductible expenses accordingly.

What About Rental Property Management Software?

Having the best accounting software is the first step toward leaving spreadsheets behind and adopting an organized approach to your rental business.

Still, it doesn’t cover all rental property management needs. If you’re a landlord or property manager, you need to collect rent payments, coordinate maintenance management, take care of online payments, tenant screening, schedule cleaners for your Airbnb, take care of synchronization between booking platforms.

When all these tasks start piling up, maybe it’s time to think about dedicated property management software. If you’re a landlord renting out rental properties to tenants, search for solutions that enable online rent payment and track maintenance requests (to allow tenants to submit maintenance requests directly on a dedicated tenant portal).

Long-term rental management software is designed for properties rented out for extended periods, typically months or years. It focuses on features like tenant screening, lease management, maintenance tracking, and rent collection on a monthly basis. These systems often include online rent collection, tools for managing security deposits and conducting property inspections.

In contrast, short-term rental property management software caters to properties rented out for brief periods, usually days or weeks. These systems prioritize features like channel management, integration with booking platforms (e.g., Airbnb, Vrbo), automated guest communication, and cleaning schedule management.

iGMS is a tool that can help you manage multiple listings of your vacation rentals across various platforms, coordinate check-ins and check-outs, communicate with team members effectively, send automated messages and reviews, and optimize occupancy rates as a result.

Property managers juggle a lot of tasks every day. While automation tools may seem like an extra expense, think about the cost you pay in lost time. Manually blocking off dates on one platform every time when a guest books on another or constantly reminding cleaners about checkouts adds up quickly.

Wrapping Things Up

The process of choosing the best bookkeeping software for rental property can be broken down into these steps:

1. Define your budget limits.
2. List the tools that have your desired features and positive reviews.
3. Create a shortlist of solutions that fit your budget.
4. Make a final decision by trying out a free trial if it’s available, or simply go for a monthly subscription.

Many accounting tools offer free trials, so take advantage of this opportunity to make a definitive decision.

If you’re an Airbnb owner looking to pair up financial management with an effective property management system, check out iGMS. You will get:

• Automatic scheduling for cleaners and team members
• Automated messages and a unified inbox that displays all guest communications
• A channel manager that prevents double bookings
• Market insights with AI-powered analytics