Rental Income and Expenses Spreadsheet
Download REI Grove’s rental income and expenses spreadsheet to track income, expenses, security deposits, monthly totals, annual totals, and net profit or loss.
Key Takeaways
- Rental income and expense tracking helps landlords understand cash flow, profit, and losses.
- Landlords can record dates, categories, tenants, payment methods, amounts, and notes for clearer bookkeeping.
- By using this spreadsheet, rental property owners can organize financial records and review monthly or annual rental performance more easily.
- REI Grove’s spreadsheet is organized into four main areas: income, expenses, security deposits, and profit/loss reporting.
Tracking Your Rental Income and Expenses
Tracking your cash flow is an essential part of realizing the highest return from your investment property. That said, it's easy to get overwhelmed by accounting. It's no wonder why — tracking rent payments, security deposits, fees, insurance, and other factors by hand can easily start to make the numbers blur together.
One way to organize your rental properties' finances is through a rental income and expenses worksheet, similar to some of the best Excel templates for rental property finances. With our tracking tool, you can accurately summarize your cash flow, better understand your profits and losses, and visualize the overall financial health of your business.
Rental Income and Expenses Spreadsheet at a Glance
| Spreadsheet Section | What It Tracks | Why It Matters |
|---|---|---|
| Section 1: Income | Rent, fees, payment method, tenant, amount, invoice number, and notes. | Shows how much revenue the rental property brings in. |
| Section 2: Expenses | Expense date, category, amount, and notes. | Shows what the rental business spends money on. |
| Section 3: Security Deposits | Security deposits, pet deposits, other deposits, tenant, amount, and notes. | Separates deposit tracking from ordinary income. |
| Section 4: Profit & Loss | Monthly and annual totals for deposits, income, expenses, and net profit/loss. | Summarizes the property’s financial performance. |
What is Rental Income and Expense Tracking?
Your rental income and expenses are just what they sound like: the revenue brought in from your rental properties as well as any costs that may accrue for maintenance, taxes, insurance, and other rental property upkeep. It's vital to keep detailed records of any income and expenses you encounter so you can operate your business effectively and understand how profitable your properties are.
To keep track of this information, you can keep physical records and add and subtract totals by hand, you can use an automated approach via property management software (like Innago), or you can download a rental income calculation worksheet online. By consistently reviewing the income and expenses of your properties, you can gain insight into how much profit you're earning from properties both monthly and yearly as well as opportunities to improve your profits further.
IRS Definition of Rental Income and Expenses
According to the IRS, “Cash or the fair market value of property or services you receive for the use of real estate or personal property is taxable to you as rental income. In general, you can deduct expenses of renting property from your rental income.”
Rental Income
The IRS defines taxable rental income as:
- Rents
- Amounts paid to cancel a lease
- Advance rent
- Expenses paid by a tenant
- Security deposits (only if used to cover the last month of rent, to pay for damages left by a tenant, or to cover a broken lease — not if the deposit will be refunded)
Rental Expenses
The IRS defines deductible expenses from your rental income as:
- Depreciation
- Repair costs
- Operating expenses
These forms of revenue and costs are all components of your overall rental income and expenses, which should be meticulously recorded and kept safe to reference when reviewing finances for your rental investments.
Components of Income and Expenses
To begin tracking gross income and expenses from your rental properties, you must first know what income and expenses are important to keep record of. Both income and expenses are multifold, and their components come together to give you an idea of your profits and losses over a specified period.
Your monthly rental income, for example, will likely be mostly comprised of rent payments from your tenants; however, your rental income can include security deposits, application fees, utility payments, or other non-refundable fees such as pet rent. Each month, for each tenant, you should list the date, payment amount, tenant name, and reason. These payments can be easily added together later to calculate your monthly and annual income.
Your rental property expenses can be just as diverse as your forms of income. Cleaning, insurance, maintenance and repairs, property management, property taxes, and utilities are just a few of the common rental expenses a landlord must pay to upkeep their units. Just like with your income, you should keep detailed notes of expenses. Each month, you should list the date, payment amount, and reason.
By including as much detail as possible in your income and expense tracking, you can further explore categories of revenue bringing you the most profit and costs that are taking the most money from your wallet. You can also understand the overall profits and losses of your properties by tracking your income and subtracting your expenses. These outputs are a good indicator of the financial strength of your properties and can highlight opportunities for improvement and growth.
Benefits of Tracking Your Income and Expenses
It may seem like common sense that knowing where your money is going is important, but its significance cannot be overstated for real estate investors. Understanding how much you're spending on various services and what you're really bringing in from tenants to offset those costs can indicate whether the rent you charge is appropriate in the current market. It's also a good way to calculate your net profits or losses for a given period, letting you see the bigger picture of your rental business' financial health.
Luckily, rental property owners don't need to be accountants to compute basic rental finances. Using a rental property income and expenses worksheet allows you to input your income, expenses, and other financial information to automatically calculate your profits and losses. REI Grove’s rental income worksheet in Excel can help landlords like you compile fundamental rental metrics, hassle-free.
Looking for even more automation? You might be better served by software. Innago’s expense and reporting feature allows you to access, organize, and report on your financials with automated invoicing and bookkeeping, and understanding operating expenses for tax purposes can help you categorize costs correctly from the start.
What Does REI Grove’s Rental Income and Expenses Spreadsheet Cover?
REI Grove’s rental income and expenses spreadsheet is designed to help landlords track monthly rental income, expenses, and security deposits, then summarize totals in a profit and loss report.
This spreadsheet includes:
- Income tracking
- Expense tracking
- Security deposit tracking
- Monthly totals
- Net profit or loss
Section 1: Income
The income section helps landlords record money received from tenants or rental-related charges. Each income entry can include the date, category, invoice number, payment method, tenant, amount, and notes.
This section includes:
- Date
- Income category
- Invoice number
- Payment method
- Tenant
- Amount
- Notes
The profit and loss sheet summarizes income categories such as rent, fees, and other income.
Section 2: Expenses
The expenses section helps landlords record costs tied to operating and maintaining the rental property. Each entry can include the date, category, amount, and notes.
This section includes:
- Date
- Expense category
- Amount
- Notes
Common expense categories include advertising, appliances, bank fees, capital improvements, cleaning, insurance, legal and professional fees, licenses and permits, maintenance and repairs, management fees, mortgage and loans, office supplies and software, taxes, travel, utilities, vehicles, and other expenses.
Section 3: Security Deposits
The security deposits section keeps deposit activity separate from regular income. This makes it easier to track deposits that may need to be returned, applied, or reviewed later.
This section includes:
- Date
- Deposit type
- Tenant
- Amount
- Notes
The profit and loss sheet summarizes deposit categories such as security deposits, pet deposits, and other deposits.
Section 4: Profit & Loss
The profit and loss section summarizes financial activity across the year. It pulls from the income, expenses, and security deposit sections to show monthly and annual totals.
This section includes:
- Total deposits
- Total income
- Total expenses
- Monthly totals
- Annual totals
- Net profit or loss
Conclusion
Assessing the finances of your rental business doesn't have to be stressful. Taking steps to organize your income and expenses will enable you to understand your business and help it grow. A simple rental property income and expense worksheet template is the easiest way to start to track rental income and better understand your rental property finances.
Download REI Grove’s Rental Income and Expense worksheet to start tracking your cash flow and organizing your rental business.
FAQs
What is rental income and expense tracking?
Rental income and expense tracking is the process of recording the money your rental property earns and the costs required to operate it.
What does the rental income and expenses spreadsheet include?
The spreadsheet includes income, expenses, security deposits, monthly totals, annual totals, and net profit or loss.
What should landlords track as rental income?
Landlords should track rent, fees, other income, payment dates, payment methods, tenant names, invoice numbers, amounts, and notes.
What should landlords track as rental expenses?
Landlords should track repairs, maintenance, insurance, taxes, utilities, management fees, legal fees, supplies, and other operating costs.
Why are security deposits tracked separately?
Security deposits should be tracked separately because they may be refundable, applied later, or treated differently from ordinary rental income.
What is a profit and loss report?
A profit and loss report summarizes total income, total expenses, and net profit or loss over a specific period.
How does this spreadsheet calculate monthly totals?
The spreadsheet uses transaction dates and categories to summarize income, expenses, and deposits by month.
Why should landlords track income and expenses consistently?
Consistent tracking helps landlords understand cash flow, prepare records, evaluate profitability, and spot problem areas.