Bookkeeping that survives a portfolio: one ledger per property, from day one

The first rental gets managed out of a personal account and a spreadsheet. It works. The fourth one does not, and by then there are three years of commingled history to untangle. What a portfolio needs is boring and cheap to start. A separate bank account per entity — at minimum, one for the rentals and never the personal account. A chart of accounts with the categories the tax return actually uses, so the year-end export maps straight across. And a class or property dimension on every transaction, so any expense can be attributed to the property that incurred it. Three things depend on that and are painful without it. The tax return needs income and expenses per property, not in aggregate. A refinance or a new purchase means a lender asking for an operating statement for a specific property, and reconstructing one from a blended account takes days. And at sale, the basis — purchase price plus capitalised improvements, less depreciation — has to be supportable with documents, sometimes a decade later. The distinction that causes the most rework is repairs versus improvements. A repair is deducted now; an improvement is capitalised and depreciated, and it adds to basis. Deciding at the moment of the expense, with the invoice in hand, is easy. Deciding three years later from a bank line that says the contractor's name is guesswork. Keep the closing statement, the depreciation schedule and the improvement log for every property in one place. They are the documents nobody can recreate. This article is general information, not legal, tax or financial advice. Rules change and every deal is different — check your own case with a licensed professional. Alberto Zaltzberg — Adonait · adonait.com