Real estate bookkeeping
Real estate bookkeeping checklist
A rental property's books follow the building, the tenant and the loan. The monthly request should collect the rent roll, the lease changes, the property management statements, the repair and improvement invoices and the mortgage statements. Keep the operating costs separate from the capital improvements so the depreciation schedule stays correct.
Who sends itSent by the property's bookkeeper after the month ends, usually by the 10th. It covers every entity, property and unit the client owns.
0 of 17 ticked
01Rent and tenants
02Property costs
03Loans and tax
04Banking and ownership
What firms get wrong
- Recording a security deposit as rental income in the month it is received.
- Expensing a capital improvement as a repair and losing the depreciation.
- Reconciling the operating account but not the separate security deposit account.
- Matching the property management statement to the bank without checking the management fee.
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Questions about this checklist
What records does a rental property owner need each month?
The rent roll, lease changes, property management statements, repair and improvement invoices, utility bills, mortgage statements and bank statements. Keep the capital improvements separate from the routine repairs.
How do I tell a repair from an improvement?
A repair keeps the property in its current condition, such as fixing a leak. An improvement adds value, prolongs the life or adapts the property to a new use. The distinction affects whether the cost is deducted now or depreciated.
Where does security deposit money go?
A security deposit is usually a liability, not income, until it is applied to unpaid rent or damages. Keep it in a separate account if the state requires one, and track each tenant's amount.
Is rental income reported on Schedule E?
Rental income and expenses from a residential rental property are generally reported on Schedule E. A property held for sale to customers, or a short-term rental with substantial services, may be reported differently.
Sources
- IRS: Publication 527, Residential Rental Property
- IRS: Publication 946, How to Depreciate Property
- IRS: About Form 1099-S
Checked November 3, 2026. Tax rules, forms and thresholds change; confirm them with the IRS or your tax software before relying on them.
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