Property accounting
Accounting for property managers, without the jargon
Rental accounting comes down to four habits: keep a tenant’s money apart from yours, see what each property earns on its own, check every payment against the lease, and close each month the same way. Here is what each one looks like, with the figures drawn out.
14 days before the first charge · Nothing is switched on until you say so
One month of one flat
Rent
- Repairs and running costs−€120
- Management fee−€72
- Paid to the owner€708
Deposit
Held, not spent
Returned at move-out, less any documented damage
The first rule
Keep a tenant’s deposit out of your operating funds
A security deposit is not yours until the tenancy ends and the property is checked. In many places holding it anywhere but a separate account is against the law; even where it is not, mixing it with rent you actually intend to spend is how a landlord ends up short at move-out, unable to tell their own money from a tenant’s. Keep it in its own account and treat it as somebody else’s money until the day it is either returned or legitimately kept.
- Rent received
- €900
- Repairs and running costs
- −€120
- Management fee
- −€72
- Paid to the owner
- €708
- Deposit received
- €1.800
- Spent on operating costs
- €0
- Still held for the tenant
- €1.800
Where you are: how a deposit has to be held
Keeping a deposit apart is the habit; the rules behind it are local. How large a deposit may be, where it has to sit, and what an agent holding other people’s money needs all differ by country, and in Belgium by region. Pick a place to see what we found, and the sources we read it in.
Elsewhere
General guidance- Many places cap the deposit and say where it has to be held, but the amounts and the account differ.
- A manager holding other people’s money is often required to keep it in a separate client or trust account.
Check your local tenancy law, and ask your professional body what it requires of an agent.
The second rule
Track each property on its own, not just the portfolio as a whole
A single combined total tells you the portfolio made money; it cannot tell you which property made it and which one is being carried by the others. Record rent and every expense against the specific building or unit it belongs to, and profitability per property becomes visible rather than assumed.
One year, each bar is that property’s rent
- Annual expenses
- Net
- Property AAnnual rent €14.400Annual expenses €4.200 · Net €10.200Keeps 71% of its rent
- Property BAnnual rent €10.800Annual expenses €5.100 · Net €5.700Keeps 53% of its rent
- Combined, aggregate onlyAnnual rent €25.200Annual expenses €9.300 · Net €15.900Keeps 63% of its rent
The third rule
Reconcile the bank statement, do not assume a payment landed
A lease says what should arrive and when. The bank statement says what actually did. Checking one against the other, amount, date and payer, catches a shortfall, a late payment or a tenant who paid the wrong amount on the day it happens rather than weeks later, once it has become a pattern.
- Flat 1Right amount, right day, right payerMatchedLease expects €900Bank shows €900Matched
- Flat 2Full amount, arrived on the 4thLateLease expects €750Bank shows €750Late
- Flat 3Paid on time, €50 missingShortLease expects €900Bank shows €850Short
- Flat 4Nothing from this tenant yetMissingLease expects €820Bank shows NothingMissing
The fourth rule
Close every month the same way, in the same order
A month is closed when every movement on the bank has a place in the books and every expected payment has either arrived or become something you are chasing. Doing it in the same order each time is what makes it quick: each step relies on the one before it.
Step 1
Read the bank
Take every movement on the rent and deposit accounts for the month, in and out.
Step 2
Match each one to a lease or a bill
Rent against the lease that expects it, a payment out against the invoice behind it.
Step 3
Chase what did not arrive
A shortfall or a missing payment becomes a named follow-up, not a note in the margin.
Step 4
File costs against the property
Every receipt kept, and every cost booked to the building or unit it was spent on.
Step 5
Report to the owner
A statement per property that the owner can check against their own bank.
What the owner receives
An owner statement that can be checked line by line
If you manage property for someone else, the statement is where your accounting shows. A good one starts from what actually arrived, lists every cost and fee on its own line, and ends on the amount paid out, so the owner can tick each line off against their bank without asking you a question.
Owner statement, June
Property A
- Rent received
- €900
- Boiler service
- −€120
- Management fee
- −€72
- Paid to the owner
- €708
- Deposit held separately
- €1.800
- 1
What actually arrived, not what was due. A shortfall shows as its own line, not a smaller figure.
- 2
Each cost against this property, with the invoice kept behind it.
- 3
The fee on its own line, never netted silently out of the rent.
- 4
The payout, which equals the rent less every line above it.
- 5
The deposit, reported but kept out of the total: it is still the tenant’s.
One term to know
Cash-basis and accrual-basis bookkeeping, in plain terms
Cash-basis accounting records income and expenses on the day money actually moves. Accrual-basis records them on the day they are earned or owed, whether or not the money has moved yet. Neither is a tax choice this page can make for you, how rental income is taxed depends on where you are and which basis local rules require, but the concept itself is straightforward once it is stated plainly.
Recorded as July income, the month the money actually arrived.
Recorded as June income, matched against June’s expenses, the month it was earned.
Which basis applies to your rental income is a question for the tax authority, or an accountant, where the property is.
Where Dardaris fits
The bookkeeping, already split by property
Dardaris tracks every figure exactly, with nothing rounded, against the building or unit it belongs to, reads payments from a connected bank account and reconciles them against what the lease expects, so the shortfall above is a case that opens the same day rather than a discrepancy found at year-end.
In Dardaris
Rent check, 1 June
- Flat 1 €900Filed to the lease
- Flat 2 €750Filed, marked late
- Flat 3 €850Case opened
- Flat 4 NothingCase opened
Bank sync and reconciliation
Movements are read from the connected account and matched to what each lease expects; a mismatch opens a case rather than getting waved through.
Figures per property, not just per portfolio
Rent and running costs are filed against the building or unit they belong to, so profitability per property is a number you can see, not one you have to reconstruct.
A filing cabinet ready for tax season
Every document and figure sits in one searchable place against the property it concerns, rather than scattered across statements and folders.
Questions about property accounting
Do I need a separate bank account for rental income?
For a security deposit, in many places yes, by law, and even where it is not required it is close to a universal best practice: it stops a tenant’s money being mistaken for yours. For rent itself the requirement varies more, but keeping it in an account you track separately from personal spending makes the rest of this far easier.
What is a trust account, and does a property manager need one?
A trust account, also called a client account, holds money that belongs to someone else: an owner’s rent before it is paid out, or a tenant’s deposit. In many places a manager who handles other people’s money is required to keep it in one, apart from the business’s own funds. Whether that applies to you, and how it is checked, depends on where you work, so confirm the local rules with your professional body or an adviser.
What’s the difference between cash and accrual accounting for landlords?
Cash-basis records a payment on the day it actually moves. Accrual-basis records it on the day it was earned or owed, whether or not it has moved yet, so June’s rent paid in July still counts as June’s income. Which one you should use for tax purposes depends on where you are and the rules that apply there; this page explains the concept, not which one to file under.
How do I track expenses per property instead of just overall?
Record every expense, and every rent payment, against the specific building or unit it belongs to rather than one combined total. It takes no more effort than logging the same expense once instead of twice; the difference is that profitability per property becomes a number you can actually see instead of one buried inside a portfolio-wide total.
How often should I reconcile the rent account?
At least once a month, as part of closing the month. Checking as payments arrive is better still, because a shortfall found on the day is a conversation with one tenant, and one found at year-end is an afternoon with twelve statements.
What should an owner statement include?
The rent actually received for the period, each cost paid against the property with its invoice, the management fee on its own line, and the amount paid out to the owner, which should equal the first line less all the others. Deposits held are worth showing too, kept outside that total because they still belong to the tenant.
Can I do this in a spreadsheet?
Yes, for a handful of units, if you keep one row per movement and a column for the property it belongs to. What a spreadsheet will not do is read the bank for you or notice that a payment is missing; that part stays manual, and it is the part that slips first when the month is busy.
Books that show one property at a time
Dardaris keeps every figure filed against the property it belongs to from the day you add a building, with the bank read automatically behind it.
14 days before the first charge · Nothing is switched on until you say so