Best Real Estate Accounting Tips for Agents and Brokers

Fact is, most agents “wing it” and only deal with their financial situation at tax time. But you know what else is true about most real estate agents? Analyze your business better with insightful reports, by simply linking your real estate transactions to your income and expenses. Realtyzam starts at $9.95/month when billed annually (or $12/month billed monthly).

In addition, Xero allows more than 700 integrations, making it a flexible and scalable option. If you’re just starting out in your career, look into a tool like Lendio’s software to categorize your expenses and income. Our services are free for realtors and other small business owners, and we also offer tax assist tools and personal bookkeeping services as you need them. Did you know that it is not just real estate transactions that local and state commissions oversee? These bodies also oversee the financial management of a real estate business, so playing by the rules is essential. Therefore, it’s a good idea to familiarize yourself with their requirements before making any decisions about your bookkeeping system.

Hands Off Bookkeeping & Accounting

Zoho’s banking module allows bank syncing and PayPal integration, along with quick and easy reconciliation, but the user can match and categorize transactions if desired. Zoho learns transactions and categories for future time-saving reconciliation. Zoho Books works well for start ups, small to medium businesses and even large brokerages. Users already working in the Zoho ecosystem will naturally turn to Zoho Books for accounting needs, but the software can also stand alone.

We found Realtyzam especially useful for real estate agents with no accounting experience and those who want to track expenses and commissions by listing. Programs like QuickBooks Online are great tools for real estate brokers and agents. You can track sales, commissions, and expenses by each listing. Proper account set up can also report all sales details; telling you exactly how profitable that listing was for your real estate brokerage. For potential customers, CORE Back Office offers a 14-day free trial to try the software. Brokerages can expect to pay a monthly subscription fee that includes a base amount plus a per-agent fee.

Sage Accounting: top real estate accounting software for micro businesses

Once you hit that cap in commission fees, you take home 100% of your commissions. Apply for financing, track your business cashflow, and more with a single lendio account. Kelly is an SMB Editor specializing in starting and marketing new ventures. Before joining the team, she was a Content Producer retail accounting at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Forbes Advisor adheres to strict editorial integrity standards.

For these reasons, it is unsuitable for landlords with a large portfolio of properties or those that need to manage their business on the go or via staff members who use a variety of devices. With plans starting at $52, Buildium offers lots of features for managing rental properties’ finances and tenant journeys. It’s the middle ground – outsourcing accounting tasks to a third party like Xendoo – that will make the most sense for many real estate agents and brokers. This option keeps the costs down while still freeing up your time and utilizing experts to make sure the work is done properly. You can see where you need to cut back expenses or try to increase income. I’m always amazed at the people that realize Zillow is a losing strategy for them after they look at their profit and loss statement.

QuickBooks Online: Best Overall Real Estate Accounting Software

Real estate agents have some of the most diverse expenses in business. They face costs ranging from landscaping services that improve curb appeal to lunches for clients and gifts for buyers. Realtors’ expenses can reach a few hundred dollars a month or into the thousands, depending on their listings, marketing strategies, and many other factors. Real estate agents also accrue these business expenses daily—which means you can easily get overwhelmed if you don’t have a system in place. There’s nothing better than being able to save a little extra time and money as a real estate agent.

As with any accounting practice, real estate accounting requires tracking income and expenses to create a clear overview of each property’s cash flow. You can use this information to make tax payments and prepare the business owner for a potential audit. Property management companies can also use real estate accounting software to run financial reports on income and expenses from rental properties. The reports can give you an overview of rental income, vacant units, and expenses on advertising, repairs and maintenance, and more. Realtyzam is another dedicated real estate accounting software created for real estate agents.

This information will be essential when separating personal and professional gas costs, insurance payments, wear and tear, etc. Mazuma is a licensed accounting firm based in Orem, Utah, and members of the AICPA. We provide professional accounting services to businesses and individuals, with a focus on small business bookkeeping and taxes. Ben Sutton is the founder of Mazuma USA, an accounting firm providing tax, bookkeeping and payroll services to small businesses.

For example, you must set a reasonable salary for the owner of the company. Not doing so can lead to IRS scrutiny and lost tax savings. The way you can deduct certain expenses also changes when you become an S-corporation, such has vehicle and home office expenses. Educating yourself on these concepts or working with a professional goes a long way for S-corporations.