How to Set Up QuickBooks for Real Estate Investors

Setting up QuickBooks the right way is crucial for real estate investors. Whether you’re flipping houses, managing rentals, or juggling multiple investment strategies, a well-organized chart of accounts will save you headaches and money down the road. Unfortunately, QuickBooks doesn’t come pre-built for real estate, so you need to customize it to suit your business.

In this guide, I’ll walk you through how to set up QuickBooks categories and accounts step by step so you can maximize tax deductions, streamline reporting, and simplify bookkeeping for your investment properties.

Why Proper Category Setup Matters

If you don’t take the time to customize your categories and accounts, you could:

• Miss out on valuable tax deductions

• Struggle to track profitability per property

• Make tax season a nightmare

• Have messy books that confuse you and your CPA

A proper setup ensures that every dollar is categorized correctly, and you have the right reports available when you need them.

Step 1: Customize Your Chart of Accounts

Your Chart of Accounts (COA) is the backbone of your QuickBooks setup. It organizes all your transactions into categories like income, expenses, assets, and liabilities.

Real Estate Investor’s Essential Chart of Accounts

Bank & Cash Accounts

• Checking

• Savings

• Cash on Hand

Income Accounts

• Rental Income (if applicable)

• Rehab - Selling Price

• Sales of Product Income

Expense Accounts

• Mortgage Interest

• Rehab - Purchase Price

• Rehab - Restoration costs

• Repairs & Maintenance

• Property Management Fees

• Legal & Professional Fees

• Advertising & Marketing

• Insurance (Business, Liability, Property)

• Office Expenses (Supplies, Software, Communication, Licenses)

• Payroll Expenses

• Contract Labor

• Rent (Office, Equipment, Storage)

• Travel & Vehicle Expenses (Fuel, Maintenance)

• Meals & Entertainment

• Taxes & Licenses

Asset & Liability Accounts

• Property Purchase Costs

• Property Improvements

• Security Deposit Withholdings (Asset)

• Rehab In Progress (Buying Costs, Restoration, Holding Costs, Debt Service)

• Loans Payable (Private Money, Hard Money, SBA Loans)

• Security Deposits Held (Liability)

• Long Term Rental (Land, Buildings, Depreciation)

This detailed setup ensures that every transaction in QuickBooks is properly categorized for clean books and easy tax prep.

Step 2: Creating & Managing Classes for Properties

QuickBooks has a Classes feature that allows you to track income and expenses by property.

✅ Example: If you own 5 rental properties, you can assign each transaction a class (e.g., "123 Main St.") to separate income and expenses for each property.

This makes it easy to see how each investment is performing at a glance.

How to Enable Classes:

1. Go to Settings > Account & Settings.

2. Click Advanced > Categories.

3. Turn on Track Classes.

4. Apply classes to transactions when recording them.

Step 3: Setting Up Bank Feeds & Rules

To automate bookkeeping, link your bank accounts and set up rules to categorize transactions automatically. BUT BE CAREFUL - auto add has been the #1 issue I have run into while cleaning up books, so make sure that it is 100% correct before setting up a rule. 

How to Connect Your Bank Accounts:

1. Navigate to Banking > Link Account.

2. Find your bank and log in.

3. Select which accounts to sync (checking, savings, credit cards).

How to Create Bank Rules:

1. Go to Banking > Rules.

2. Click New Rule.

3. Name the rule (e.g., "En").

4. Set conditions (e.g., if payee contains "Home Depot").

5. Choose the correct category (e.g., "Repairs & Maintenance").

6. Save the rule.

This saves hours of manual work and ensures transactions **always go to the right category **(as long as correctly set up).

Step 4: Automating Recurring Transactions

For mortgage payments, insurance, and property management fees, you can set up Recurring Transactions so they’re entered automatically each month.

How to Set Up Recurring Transactions:

1. Go to Gear Icon > Recurring Transactions.

2. Click New and select the transaction type.

3. Set up the details (amount, category, payee).

4. Choose how often it recurs (monthly, quarterly, etc.).

5. Save the transaction.

Now, QuickBooks will auto-record these expenses, but keep in mind that amounts like interest and principal payments change each month. I typically update these at the end of the year, though doing it monthly is completely doable as well. See this as having the skeleton set up as a recurring transaction and you just need to update it slightly for the adjustments.

Step 5: Generating Reports to Track Performance

Once your categories and accounts are set up, you can generate real estate-specific reports to track profitability.

Essential Reports for Real Estate Investors:

• Profit & Loss by Property (Class Report) – Shows income and expenses per property.

• Cash Flow Statement – Tracks money flowing in and out.

• Balance Sheet – Lists assets (properties) and liabilities (loans).

• Rental Income Summary – Summarizes rent collected per unit.

To run these reports:

1. Click Reports in the left-hand menu.

2. Search for the report name.

3. Customize the filters (dates, classes, etc.).

4. Click Run Report.

These reports will help you make informed investment decisions and stay prepared for tax season. I personally set up special reports for my clients that are specific to each property and include extra details, such as estimated debt service. However, this is an advanced skill, and I wouldn’t recommend it to anyone who isn’t comfortable working with detailed report customization in QuickBooks.

Final Thoughts & Next Steps

Mastering your QuickBooks setup is one of the best things you can do to keep your real estate business organized and profitable. A properly structured Chart of Accounts, well-managed classes, and automated transactions will save you time, reduce errors, and make tax season far less stressful. Plus, the ability to generate clear and accurate reports means you can track your portfolio's performance and make data-driven investment decisions.

If you're new to QuickBooks or feel overwhelmed with setting everything up correctly, don’t worry—I’ve got you covered. I personally work with real estate investors to set up custom reports, fine-tune categories, and optimize QuickBooks for their specific needs. Whether it’s breaking down profitability per property, tracking estimated debt service, or simply ensuring every dollar is accounted for, I can help you create a system that works seamlessly.

💡 Need help customizing QuickBooks for your real estate business? I offer exclusive discounts on new QuickBooks subscriptions and can help you get set up the right way.

👉 Looking for the best accounting software options for real estate investors? Check out my guide on the 5 Best Accounting Software for Real Estate Investors here

🚀 Want to streamline your bookkeeping and stop stressing over spreadsheets? Schedule a free consultation with Voyage Bookkeeping today!