How to Budget Multiple Rental Properties on YNAB?
I buy and sell mobile homes...weird, I know. I hate Quickbooks. It's not user friendly and I've wasted hours of my life trying to problem solve the smallest of issues. YNAB seems to be an almost perfect fit for my business. HOWEVER, I can't quite figure out how to make it work for tracking expenses on multiple properties where I've setup a rent-to-own situation with tenants.
I like to track each property separately so I can calculate the return on investment of each home and see the numbers clearly. However, at the end of the year I'm going to have about 10 different properties with 10 different Utilities, Rental Income, Contractor Payments, etc. in separate columns. So the alternative (I think) would be to track every home's utilities, rental income, contractor payments, etc together under one Expense Category but then I can't run the numbers on each individual home.
The one benefit QB has over YNAB is the class system. In QB I can just type each property into a class in QB and run a report where I can see the PnL of each home that way.
Does anyone have any ideas how I can best make this work for me? I really hate QB and don't want to keep going with that system. The budgeting part of YNAB really helps me know what I can and can't afford right now with my company and I love it. I'm sure there's a way to make it work, I'm just still new enough with this system that I haven't figured it out...yet.
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Much as it may not sound great, having a category group for each rental would be the easiest when trying to pull reports. So rental 1 would be one group, rental 2 would be another, and each group will have the same categories. Then you could easily see the expenses for just that category group and compare to the income for that property.
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Did this topic disappear before? I was about to respond and I swear it vanished! :)
I was going to say the same as Tobias. Maybe you could set it up like I did below. When you run your report, everything will show up under "expense," but it will still show a correct accounting of the totals.-
KaraBoo It totally disappeared for like an hour or something! I was trying to find it. I wonder if they were approving it or something?
And thank you for sharing your screen! That's exactly how I was thinking and sort of have it setup at this point. Have you filed taxes using the system you have setup right now? I'm just curious if it was fairly easy with that setup you have there? And do you have an extra column for expenses that might fall outside the homes?
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Drew White That's just a sample I set up to show you an idea of how you could do it. I am an independent contractor and work for myself though (just not in real estate). I print things out from YNAB for my accountant every year and he never has a problem with it. As long as I can back up what I'm showing him (through bank records, receipts, etc) if I were ever to be audited, it's all good.
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Another idea I had was to basically add each home as a manual bank account and just enter everything in manually. I don't have an insane amount of transactions. So I could easily keep up with it. Anyone think that might work? I saw a video with a guy a few years back who had real bank accounts setup for each home he was renting out but I don't want to actually setup a separate bank account for each home b/c sometimes I sell them for cash. And sometimes I sell them on payments.
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Drew you actually incur expenses in the real-world accounts. Those must be recorded there.
You can record expenses as transfers into a tracking account for each property, but I would NOT recommend that. A simple search for the property group gives the same information.
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Hi Drew! We have two suggestions for handling rental properties, depending on how you have things set up. Sounds like option two will work best, based on what you've mentioned!
If you have a separate account for each rental/flip property:- Create a separate budget for each property.
- Add only the accounts pertaining to that budgets' property.
- Create categories for each expense associated with that budgets' property, including any maintenance expenses, mortgage, utilities (if being covered by you), paychecks to any maintenance individuals, taxes, any Home Owner Association fees that may be required of some properties, etc.
- Lastly, we recommend creating a category for your net income; how you handle this net income is up to you!
If you use the same account for both personal expenses and your rental/flip properties, follow these steps:
- Create a separate category group for each property.
- Add expense categories to those category groups (such as the examples listed above) for each individual property. This can become a little trickier to manage because you won't be able to track the rental income as easily.
- When you receive rent payments, create a new Payee for each rental property and categorize the income as Inflow: To be Budgeted.
Now you can use the Income v Expense Report to track your income and expenses for those properties, like KaraBoo's screenshots. If you have any questions at all, please let us know. We're always happy to help!
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I've toyed around this topic on my own - I actually arrived at Nicole's second method, but track rents by inputing a negative value into the 'rent' sub category at the when the rent clears (not before, because this would artificially fund your 'to be budgeted' before the money is there). This allows me to budget that money the next month when it clears and 'zeros' the sub category. Rents are simple to track then, as you can roll up multiple units into one category as below (small triplex below). I have my sub categories below for example, but everyone has their preference. I also make little note in expenses that I'll use for tax prep, like "contribution" "distribution" or "professional dues" which REALLY speeds up tax time :)
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Violet Boat I know this thread is getting older, but I'm very curious about the negative value method. If I understand right, this solves needing to categorize rental income as "To Be Budgeted" and instead being able to assign it directly to the category for the rent for that unit -- but I'm wondering if there are drawbacks to this? How do you then work with that rental income, since it gives you $0.00 in the "Available" column, which isn't technically true?
...Or maybe I'm missing something! 😂 Thanks for sharing this idea! I'm so intrigued!
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I've never posted on a forum before so I don't know if this will ever be seen and if I can combine topics. I too HATE Quickbooks and am a Property Manager and am preparing to switch to YNAB for the new year. So far I LOVE IT! AS IN REALLY REALLY LOVE IT!!
What I have done is created a budget very similar to Violet's for the first property (off of my taxes so it's easy to report) and then found the 'Make a Fresh Start Button' so I can quickly transpose those fields into the next property and I just rename it to the new address. It seems to work wonderfully BUT I want to ask you all, who have been using it for the long-haul if this creates any kinks? I have 22 properties to go.
What I am currently trying to learn is how to track rent paid. Sometimes it comes in unproportionately and sometimes there are fees. In QB I would create an invoice and as the tenant did partial or full rent payments it was automatically tracked. Looks like I need to do a monthly scheduled transaction in their individual checking account so I can watch for it to come in but what if they only do a partials payment? Looks like I can't do a monthly income in Budget? I'm so confused on this. Please help!
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Silver Clarinet I would add an Accounts Receivable (AR) account as a Tracking (off-budget) account type. Make scheduled transactions in that account for each property to INFLOW the expected rent. (It's an asset as you are owed this money.) Put the property identifier in the memo field for reference. Any fees would be similarly recorded. When someone pays, record this in the normal on-budget account as a transfer from the tracking account (again, with the property identifier in the memo field).
In the AR account, when a property is paid up / current, you can clear all transactions related to that property and reconcile to a $0 balance. This allows you to hide those properties, leaving the overdue / partial payment properties showing. If you want to focus on a particular property, just search for its identifier in the memo field. Again, make sure you always put the relevant identifier on every transaction (outflows and inflows).
Silver Clarinet said:
Looks like I need to do a monthly scheduled transaction in their individual checking accountThis sounds dangerous. Do you have separate checking accounts that are on-budget for each property? You really don't want to record an inflow that hasn't happened yet in an on-budget account. Doing so means you wouldn't actually have all the cash that your budget says you do. Categories filled with Monopoly money is a ticking time bomb.
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Silver Clarinet Reading your post again, it appears you're making a separate budget for each property? Is that correct? If so, that would require a separate bank account for each property, since a given real-world account should only be in a single budget. I really don't think separate budgets for each property is a good idea.
The single budget is for the "business" and has the business account(s) on-budget.
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dakinemaui I am a Realtor and we are never allowed to comingle funds, therefore every property, even owned by the same landlord has it's own checking already and also in YNAB it's own Budget so this might be my golden answer. I still have to play with the system because I am not grasping how to transfer from a tracking fund to an actual checking account.
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Silver Clarinet And I just realized that I am 'Silver Clarinet' :) Brain overload. I wanted to add that when you do a recurring transaction or one that is ahead of schedule it is 'greyed out' and is not counted in the budget. Still see what you are saying so I will keep playing. All thoughts and suggestions are gratefully appreciated.
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Silver Clarinet Juggling 22 budgets still seems awkward. Plus, it's not like you're planning/saving for expenses for each property, right? I would still suggest a single budget whose budget accounts are those of the business. The categories are planning the expenses for the business itself.
The individual property accounts could each be tracking accounts in that budget if you like. (The single account and memo identifier approach I described earlier is just a scalable way to implement what are effectively "accounts within an account".)
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Good feedback as I am trying to figure all of this out before I start the year. Would I still be able to do year end individual reports for each of my clients individually for each of their properties? I was unable to do 'sub reports' I even downloaded the Chrome Toolkit for YNAB.
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Silver Clarinet If you define "report" as a list of transactions, no problem with either the consolidated tracking account or the multiple per-property tracking accounts. You may wish to export the transactions to a CSV format from which you can generate any statement you can define outside of YNAB.
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