Bookkeeping and taxes for real estate investors
Rental property looks simple until you own three. We keep books by property, track depreciation and improvements, prepare Schedule E or your partnership return and keep the records a sale or 1031 exchange will need.
Where do rental books go wrong?
Most mistakes cost money twice, once on the return and again when you sell.
Repairs or improvements?
A repair is deducted now. An improvement is depreciated for decades, though appliances and other short-lived items can use 100% bonus depreciation again under the 2025 law.
Manager statements, copied in
Draws arrive net of fees and repairs. We record the full picture.
Properties mixed together
Without books by property, you can't see which one carries the rest.
How do we set up rental books?
One file, every property tracked separately.
| Section | Accounts, by property |
|---|---|
| Income | Rent, late fees, pet fees, other tenant charges |
| Operating | Repairs, management fees, property tax, insurance, utilities, HOA dues |
| Financing | Mortgage interest, with principal on the balance sheet |
| Balance sheet | Buildings, land, improvements, tenant deposits held |
- Residential buildings over 27.5 years, commercial over 39
- Land doesn't depreciate, so the price is split
- The de minimis safe harbor for items of $2,500 or less, elected each year
- Roofs, HVAC and turns tracked so your basis is right when you sell
- Up to $25,000 of losses against other income if you actively participate, phasing out between $100,000 and $150,000 of income
- Real estate professional and short-term rental rules checked each year
- A 1031 exchange identifies replacement property within 45 days and closes within 180
- Gain and claimed depreciation worked out before you sell
How do we measure each property?
The same way, every time, so you can decide what to keep, refinance or sell.
Net operating income
Rent minus operating costs, before the mortgage.
Cash-on-cash return
Cash flow after debt service, against cash you put in.
Vacancy and collections
Rent expected against rent collected.
Debt service coverage
NOI against mortgage payments. Lenders check it.
Capital spending
Big repairs and turns, tracked for your basis.
Tax depreciation
What you've claimed, and what it means at sale.
Investors ask us.
Ask anything else on a free 30-minute call.
Book a callSources: IRS Publication 527, like-kind exchanges
Free tools: Mileage calculator, Small business deductions, Record retention schedule
Should each property be in its own LLC?
That's mostly a legal and insurance question for your attorney. For taxes, single-member LLCs usually don't change your return, and we'll explain how each structure is reported.
Do you work with short-term rentals?
Yes. Short stays come with different income tax rules and often occupancy taxes. Platforms collect some of those, and we check what's left for you to file.
Can you work from my property manager's statements?
Yes. We reconcile the monthly owner statements to your bank and book the income and expenses behind each draw.
Tell us what's messy. We'll tell you what it takes.
Tell us what you need and get a fixed price before any work starts. No pressure and no contract.