A Simple Chart of Accounts for Rental Property Bookkeeping
December 3, 2023A chart of accounts is just a consistent list of categories you use every time you log income or an expense. Without one, every landlord ends up inventing categories on the fly, which makes year-end tax prep and property comparisons much harder than they need to be.
Income categories
Keep income categories simple:
- • Rent income
- • Late fees
- • Other income (pet fees, parking, laundry, etc.)
Expense categories aligned to Schedule E
Organizing expenses around the categories on IRS Schedule E makes tax time significantly less painful:
- • Advertising
- • Cleaning and maintenance
- • Insurance
- • Legal and professional fees
- • Management fees
- • Mortgage interest
- • Repairs
- • Supplies
- • Taxes
- • Utilities
- • Depreciation (usually calculated by a tax professional or software, but tracked here)
Why consistency matters more than the exact list
The specific categories matter less than using the same ones every single time. A chart of accounts that changes shape every few months defeats the purpose — you lose the ability to compare spending across time periods or across properties.
Frequently Asked Questions
Do I need an accountant to set up a chart of accounts?
Not necessarily for a simple rental portfolio — a starter list based on Schedule E categories is usually sufficient, though an accountant can tailor it further for a complex situation.
Should I use the same chart of accounts for every property?
Yes — consistency across properties is what makes portfolio-level comparison possible, even if one property has expenses another doesn't (like HOA fees for a condo).
Where does depreciation fit into a chart of accounts?
It's typically tracked as its own line, but the actual depreciation calculation is usually handled by a tax professional or software rather than computed manually.