How to categorize lease up expenses, date placed in service

Hello! I am setting up our first rental property in Stessa and I am wondering if anyone can help with how to categorize lease-up expenses? For example, we are adding a few decorative touches to make the property look more inviting before we show it, like flower pots and a door mat. They don’t seem to be capital expenses, or maintenance…perhaps advertising? Although that seems like a bit of a stretch.
Also, what about lease-up expenses like painting and carpet cleaning? These are under maintenance but I feel like you’d want lease-up expenses and general maintenance expenses separate from each other?

@ashleybdezi Thanks for your question. As a general rule, expenses incurred prior to your official “Date Placed in Service” are accounted for differently than they would otherwise be when incurred after the property was rent-ready. You can dial in your Date Placed in Service by visiting your Properties page and clicking on the acquisition price, which then opens the Financial Details modal.

While Stessa is built to be flexible enough to handle different income and expense situations, we do not provide specific tax advice. You’ll definitely want to check with your CPA for more information about how to categorize these specific expenses properly.

Hope that helps!

Thanks! Is there a way to add an expense category? After speaking with my accountant it sounds like we do want to separate lease-up expenses from general maintenance expenses.

No, custom categories are not supported, although new ones are sometimes added based on Wishlist popularity.

If you are capitalizing costs incurred to prepare a property for lease, you’ll most likely want to use the various Capital Expenses sub-categories. You can also use the top-level Capital Expenses bucket if there’s not a perfect fit among the sub-categories.