Transaction categories for rent and owner distribution from PM

Hi,

I’m new to RE investing and Stessa.

I only have 1 property so far and I have a few question for categorizing transactions in Stessa.

I have a property manager using Appfolio.

I’m reviewing the Appfolio statements and I see the following:

Line item #1: Rent from resident categorized as income
Line item #2: Owner Distribution categorized as expense

In Stessa, do I categorize the Owner Distribution transaction as Income:Rents and delete the Rent from resident transaction?

Thank you for help!

-Dana

@danaerp For this situation, we recommend categorizing the rent received as “Income > Rents” and categorizing the owner distribution as “Transfers > Owner Distributions.” Transfers do not impact financial reports or performance metrics and are used for tracking only.

Note that you will also want to pay attention to management fees in this scenario. If the PM fees are reported separately through Appfolio as an expense, then you should be all set. If not, then you may need to calculate these yourself and create a separate manual transaction. For more info about how to do this, check out this related thread: How to translate net PM distribution into rent and management fee

Thank you for the clarification, Devin.

-Dana

Hi Devin,

Following up with another questions related to this thread.

Are the Owner Distributions categorized as Money In?

Thanks!

-Dana

Hi Devin,

I have a few other questions after talking with my property manager today.

  1. The PM said that application fees and rental insurance payments are pass through transactions in Appfolio.

I decided to delete these transactions in Stessa.

Is it OK to delete these pass through transactions in Stessa?

  1. Stessa is pulling in interest payments from my bank. Should I delete these transactions in Stessa?

  2. For what reason, I don’t understand there was a property tax transaction in my bank account that Stessa picked up. My understanding is that all property tax payments are a part of escrow payments.

Should I delete this property tax transaction in Stessa?

Thanks for your help!

-Dana