| by Kenneth Chase | 6 comments

Best Accounting Programs For The DIY Property Investor


What are the best accounting programs for
the DIY property investor? Hey, I’m Ryan from onproperty.com.au, helping you find positive
cash flow properties. One of the really important things that you need to do when you’re investing
in property, when you own properties is you need to actually manage the finances of those
properties. So you need to keep track of income coming in. You need to keep track of expenses
going out. And you need to collate those at the end of the year and give them to your
accountant so they can go ahead and do your tax return. So what are some of the best accounting
programs out there for the DIY investor? Now, I’m going to show you the program that I recommend,
which you can all have access to really easily. But before I do, I want to give you a pro
tip that I got from Ben the buyer’s agent. Ben from Pumped on Property, who recommended
– and he does this himself – is that he gets the rental mangers to do a lot of his financial
stuff for him. So, obviously, he collect the rents, but he also gets them to pay his insurances,
gets them to pay the council rates, the water rates, all of that sort of stuff as well.
He works very closely with the real estate agents in order to get them to manage most
of his finances for him. I haven’t specifically asked him, but I imagine a portion of that
would be collating and sharing the receipts and stuff with him so that would be really
easy to keep track of that sort of stuff. So, definitely a pro tip, is to go out there
and to ask your rental manger if they can go ahead and manage this sort of stuff for
you. Ben has said that of all the people that he’s asked, no one’s ever said “no” to him.
So, it’s definitely something that you should explore. Now, the first program that I’m going to recommend
and I will recommend a couple, is a program that we all know and only a few of us love.
And that is called Excel. Here, I’m using Google Sheets, which I think is way better
than Excel because it’s just simpler, it’s free, it exists online so you can access it
from any computer and it just works. What I’ve got here is an example spreadsheet that
has every day in the year. Now, this one is a bit old. I think it’s from the financial
year 2015-16. So I just took my old business one and basically cleared it of its data.
Probably should have taken from 2016-17, but regardless, the process is still the same.
Actually, I can just go ahead and change this date. Let’s make this the 1st of July 2016
and that’s going to update all the dates. So now it is correct. Alright. So, basically, what I have here is
every single day of the year goes along the spreadsheet. This makes it quite a large spreadsheet,
but that’s fine because we’re just looking at the days. When I have income come in, so
let’s say I have rent come in on Wednesdays, that’s $350. I can go ahead and put that in.
On the next Wednesday, I could again go $350 and I can do that for my rents. What I would
ideally do, you could call this “Property 1” or you could have one of these sheets for
each individual property. So you’ve got every day of the week, but then you’ve also got
an annual summary here, which is what you’re going to provide your accountant – what your
accountant is going to be most interested in. So you could do “Property 1”, “Property
2”. If I was doing it, I’d probably have one of these sheets per property. So let’s just
call this “Rental Income”. You may also have things like “Interest on Savings” or some
other form of income, but chances are, you’re not going to need this many so we can go ahead
and delete those rows. At the top, you put all your income. And then, you go ahead and
put all your expenses. So I’ve got – these are all business expenses of mine so let’s
go ahead and delete those. For expenses, for example, you’ve got your “Rental Management
Fees”. You’ve got things like “Council Rates”. You might have “Strata Fees”. You’ve got “Insurances”,
all of this sort of stuff. And so, basically, what you do is when you pay one of those things,
go ahead and put it in this spreadsheet. So let’s say I paid council rates of $2,000 for
the year or something like that. I would go ahead and put that down. That will then add
to the summary, etcetera. You would also need a separate way to store
all of these documents, which I’ll talk about in a minute. Basically, you can go through
this. I’ve also got phantom expenses down that bottom here, which, again, are expenses
like depreciation. So, you’re not actually paying for these, but you might have, for
example, $5,000 of depreciation on your property. So that goes towards your profit and loss
for the year for the property, but it hasn’t actually come out of your pocket. That’s why
I give its own little section. So, at the end of the year, you collate all of those.
You’ll have income by category. You’ll have expenses by category. You’ll have phantom
expenses as well. You will then have totals, which you can then go ahead and provide to
your accountant. So that’s a really easy way to do it. There’s
a lot of programs and stuff out there to make it easier than Excel. But really, I find this
really simple and I don’t know why more people don’t do this. If you’re not an Excel guy or gal, let’s say
you just don’t like tracking finances at all, I would recommend a site called My Property
Tracker. Now, if we go to their pricing page, I really love this automated plan. They do
the data entry for you so whenever you get an income receipt, whenever you get an expense
receipt, you email it to them and they will then log it for you. This is great because
if you’re not sure whether or not you can actually claim something, you can email the
receipt to them, ask them, “Can I claim this?” and they will then assess it because they
have a team of experts who know these things and who can assess them. So, that’s a really
cool thing. Again, just go to onproperty.com/tracker, which is my affiliate link, so I do get a
commission if you go through that and it doesn’t cost you any extra. In fact, I think you get
a free trial at the moment, or you can go to mypropertytracker.com. So, they are some of the things that I recommend.
In terms of receipts. I would definitely recommend using Dropbox. Let’s go ahead and go to dropbox.com.
Dropbox is a program that syncs across multiple computers. But I would do is I would just
go ahead and I would create – do I want to upgrade? No, I don’t. I would just go ahead
– here, it’s easier to just use it on my desktop. I’d go ahead and I’d create a new folder and
I just call it “Property 1”. And then, I would go ahead create months. So, January – or maybe
let’s start with financial years, okay? So, 2016 to 2017, we’ll go ahead and do that.
And then I would go ahead and put in the months. So, let’s start with July 2016. And so, you
would then put all your receipts from July in there. All the receipts from August in
the August one. So the thing, as far as I’m aware and obviously speak to your accountant,
but in terms of receipts, it’s not so much something that you have to submit to the ATO,
but it’s something that you need to have if they do call upon it. And so, I would have all the months in there
for the financial year. I would store this on Dropbox because then it’s stored in the
cloud, it’s very secure. I would also back this up to an external hard drive as well
and I may even use a third backup source if I was required to by law, which I’m not sure
whether you are or not. The benefit of this is at the end of the year, you can just take
this spreadsheet, you can go ahead and go file and you can download it or you can go
ahead and share it. There is a way to share it somewhere. Up here, you can go ahead and
share this file. So I can share that with my accountant. In Dropbox, I can go ahead
and I can find the folder and you can get a shared folder link for that and I can send
my accountant that link. They can then download it straightaway and they’ve got everything
they need. So super easy to share with my accountant. Super easy to do. So when it comes to what programs do I recommend
for DIY property investors for tracking their finances, I definitely recommend Excel. If
not, My Property Tracker – go to onproperty.com.au/tracker – they can do it for you. As well as Dropbox
to save your receipts and then back them up to an external hard drive as well. That’s it. If you have any ideas, please leave
them in the comments below this video on Youtube or go to onproperty.com.au/375 and there’s
comments down there. If you’ve got software you absolutely love, if you’ve got something
that makes your life 10 times easier, please share it with my. I’m not the expert on this,
but I do this for my business, I find it really easy to do and really useful and I thought
that it may help you guys as well. So that’s it for me today. If you’re interested in taking your property
investing to the next level, you need a little bit of help to go ahead and buy that next
property, then Ben the buyer’s agent, Ben Everingham who I got the pro tip from that
I shared at the start, he is offering listeners and readers of On Property a free strategy
session with him. So if you want to invest, but something is holding you back, you need
some help, go ahead and get a free strategy session with Ben where you can talk through
your situation. Talk through your next steps and if it’s a good fit, you guys can work
together to purchase property so he can help you purchase property. So go to onproperty.com.au/session
to look at the details for that free strategy session with Ben. I absolutely recommend it
for anyone who’s considering a buyer’s agent or needs help going to purchase that next
property. Something’s holding you back and you just need someone to help you. Ben is
a great guy and I appreciate Ben offering those sessions to all the listeners and readers
of On Property. So that is it for me today, guys. Until next
time, stay positive.

6 Comments

Matt Wag

May 5, 2016, 10:08 am Reply

Great info, but what about s/w that tracks bank account details – per property per bank institution

sofie7777

Jan 1, 2017, 9:06 am Reply

Hi Ryan, I looked up Google Sheets but could not find the one you are talking about. Can you please let me know what it is called thank you

Melissa Ann Sanchez

Mar 3, 2017, 2:50 pm Reply

Thanks for the info. Going to download the google spreadsheet and see if I like it better than excel.

William Crow

Jan 1, 2018, 9:33 pm Reply

Does this person actually own any properties?????

sasmita pati

May 5, 2018, 4:01 pm Reply

Hi..its great..i would like to recomment SlickAccount for best cash flow management, budgeting, projecg pricing, forecasting etc…visit www.slickaccount.com
Startups, small business, web design business can use this software..its easy, affordable and best…

Robert Kaufmann

Aug 8, 2019, 8:23 pm Reply

Click bait. Pushing one software program

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