If you’re in real estate, you already know your business isn’t like most others. There’s a lot going on—multiple income streams, properties at different stages, commissions, repairs, fees, financing… it’s a lot to juggle. And your bookkeeping needs to reflect that.
Real estate businesses can’t just track “money in, money out” and call it a day. To get accurate reports (and keep the IRS happy), you need to track your finances differently than a typical service-based business.
Here’s how to do it the smart way—without getting overwhelmed.
Separate Each Property or Project
This is a big one. If you’re an investor, flipper, or manage multiple properties, every property is basically its own little business. Lumping all the income and expenses together makes it hard to see which ones are profitable.
What to do:
Set up Classes, Locations, or Projects in QuickBooks Online (QBO) to track each property individually. This lets you pull reports by property so you can make better decisions (like which ones to keep, sell, or never touch again).
Track Commissions Separately from Other Income
Real estate agents often get lump-sum commission payments, but that’s not always the whole story. You might have splits with your broker, referral fees, or deductions for office expenses.
What to do:
Record gross commission income, then track any splits or fees as expenses. That way, your numbers reflect what you actually earned—not just what hit your bank account.
Understand Capital vs. Operating Expenses
Not all expenses are created equal. In real estate, it’s especially important to separate:
- Capital improvements (like a new roof or HVAC)
- Operating expenses (like utilities or property management fees)
What to do:
Capital expenses usually need to be depreciated over time. Mixing them with regular expenses can mess with your taxes. A good bookkeeper can help make sure they’re categorized correctly so you stay compliant and avoid surprises.
Keep a Close Eye on Mileage, Home Office, and Travel
If you’re an agent or investor, you’re probably driving—a lot. That mileage adds up. Same goes for home office expenses and business-related travel.
What to do:
Use a mileage tracker (apps like MileIQ or QuickBooks’ built-in tracker work well). Keep receipts and notes about who, what, and why when it comes to meals and travel. These small details can lead to big tax savings.
Stay Ready for Taxes Year-Round
With so many moving parts, tax prep for real estate businesses can be a headache if you wait until the last minute. Plus, passive income, depreciation, and different entity types (like LLCs or partnerships) add extra layers.
What to do:
Keep your books up to date every month. Run profit & loss and property-specific reports regularly. And work with a bookkeeper who understands real estate (hey, that’s what we do!).