What accountancy software do landlords use?

Reply to the comment left by "Fiona Macaskill" at "07/11/2013 - 12:56":

Moving has caused some problems for me, but that was to be expected as it can be a fairly complex job, but easier with planning. You may like to know there is now a Xero for Dummies book, which includes a section on migration. It's a pretty good book. They are quite focused on making their system easy to use, and I think that's fundamentally important for small businesses.

For balance, here are some Xero downsides:
- Moving away from them may be difficult
- Cloud-based software brings new (not necessarily better or worse) security concerns, e.g. monitoring who has passwords and what access levels
- There are no facilities for Quotations, or Purchase orders (both are soon to be released I think)
- The Android app is absolutely dire. I gather a new, rewritten one is coming.
- If you're not online, you can't use it.

I'm pretty sure my accountants use Quickbooks

I use Microsoft Money. I used to have a spreadsheet for properties to show profit and loss and Money did my cashflow projections. Then I worked out how to do it all in Money. I think its all down to personal choice but if you just use spreadsheets for property and have another system to record your normal day to day expenses you will find that your spreadsheet and your bank invariably do not reconcile. And you are entering stuff twice. Make it a single entry system. Whatever system you use I recommend it combines your cashflow and profit and loss, and enables to reconcile your bank. By doing this if your bank and your accounting system balance then you know its right. And.....make sure whatever you use it backs up to the Web - Icloud, Skydrive etc,. If your system goes down then you are in trouble!!

Reply to the comment left by "Ollie Cornes" at "07/11/2013 - 13:00":

I've just had a long chat with my daughter who has a portfolio of houses and started using Xero 2 days ago - she loves it! She says the Co op do not do an automatic download facility but she can down manually without too much trouble.

Xero does sound good from the description above. I currently use the free software on Property Hawk, but there are many features that would be useful which it does not have. Does Xero enable automatic letter generation, e.g. when tenants have x amount of rent arrears (or x number of missed payments) etc? Is it compatible with Sage and Excel (import and export data to these software packages)? Is Xero designed for landlords, or is it a general accountancy package?

Hi Martin. My wife tried Xero but gave up with it she now uses Wave and it's free. Easy to set up and you can have an account for each property. It gives you a great button breakdown of where you money is going. It is also available on IPad, and you can up load photos of receipts. But my wife prefers to enter everything via the laptop/desktop computer. You can also link bank accounts and credit cards. As well as this you have an option of producing reoccurring invoices! Hope this helps

All, I'm overwhelmed with all the responses; what a great community. Lots of different views there. I must admit, I love the Xero marketing but not sure if $30 a month will be worth it whilst I just have three properties. Then again, it's probably best to set out a system and stick to it.

I agree spreadsheets are more flexible, but as I'm planning on automating (outsourcing) as much as possible, I want to reduce the chance of errors.

I'll think I'll have a wee look at Xero and MS Money. I'll get get to all and let you know how I get on.

Thanks again for the advice. Very much appreciated!
Martin

Thanks for the mention Martin - I'm glad I led to you finding your way over here!

I'm sending you a longer email about the ins and outs (almost literally!) of Xero, but in short: my sense is that it's overkill for a small portfolio, but if you're planning to scale you might consider it anyway so you're futureproof.

I have a couple of accountant friends (don't judge) who're obsessed with it, so it's definitely a great piece of software and will probably be dominant in the future...it's just a question of whether it's the best tool for your particular job right now.

A nice middle ground is the personal version, which has all the bank feeds etc without all the complexities of the full version and only costs something like £20 a year.

I use Rent Central. I wanted a web based service so that I could use it on various devices and not have to clutter up my computer with lots of software, as it always seems to slow my computer down. Most stuff I found was either really expensive, aimed at letting agents or far too complex for me to get my head round.
Rent Central is free for one or two properties and you start paying when you get up to three or so properties, you can also get a free trial to try it out. It does all the usual stuff as well as bank statement imports, an ical feed to stop me forgetting stuff like certificate renewals and also does the calculations for the property section of my tax return. I've been using it for about 6 months now and am really happy with it.

Xero support Sage in that I believe you can import a Sage file into Xero. The other way around? I doubt it unless Sage have written an importer. Sage is dead though, their business is falling apart as they've failed to realise the importance of online services.

Xero has a facility to create templates that can be used to send statements etc to tenants. I think it's mainly for emails though rather than letters. I always send emails where possible, letters are slow and expensive.

Someone mentioned Xero Personal - it's being discontinued in 2014, so don't go there.

Xero probably is overkill for a small portfolio, but if there are plans to grow it to a bigger size, I think what I'd calla "proper accounting system" is essential. Note that Xero has a lot of tools available for accountants to use to turn the contents of a Xero account into a tax return filing, it's a full suite of tools for businesses.