QuickBooks vs. Real Estate-Specific Accounting Software

“QuickBooks Online and Stessa both have their strengths, but the best choice depends on your goals and portfolio size.” - Jake Baker

Introduction:

Choosing the right bookkeeping software is a critical decision for real estate investors. Whether you’re just starting out or managing a large portfolio, the right system can streamline your finances, save you time, and keep you compliant. Here’s a breakdown of the pros and cons of QuickBooks Online (QBO) and real estate-specific platforms like Stessa to help you decide.

QuickBooks Online (QBO): The Industry Standard

QBO is one of the most widely used accounting systems for businesses, and for good reason. Here's why it works well for real estate investors:

Pros:

• Comprehensive Features: QBO offers a robust double-entry system, bank reconciliations, and customizable reporting.

• Tax Preparation Made Easier: Many tax preparers are familiar with QBO, making tax season smoother.

• Integration-Friendly: QBO integrates with various real estate tools and platforms, providing flexibility as you scale.

• Scalable: It can handle everything from small portfolios to multi-property businesses.

Cons:

• Steep Learning Curve: QBO isn't tailored for real estate out of the box, so it requires some setup knowledge.

• Feature Overload for Small Portfolios: Investors with only 1-3 properties may find it too complex for their needs.

• Higher Cost: QBO is more expensive than some real estate-specific options.

Who Should Use It:

If you plan to scale your portfolio or need detailed financial reporting and bank reconciliations, QBO is a great option. It’s worth hiring a real estate-savvy bookkeeper to set it up correctly.

Stessa: Real Estate-Specific and User-Friendly

Stessa is designed specifically for real estate investors, offering simplicity and ease of use.

Pros:

• User-Friendly: The interface is intuitive, making it ideal for beginners or those with smaller portfolios.

• Tailored for Real Estate: It’s set up for tracking rental income and expenses without requiring much customization.

• Free Option Available: Stessa offers a free version, which is great for budget-conscious investors.

Cons:

• Single-Entry System: Stessa doesn’t support double-entry accounting, which means you can’t reconcile your bank accounts. This can lead to errors or missing transactions.

• Limited Scalability: It works well for small portfolios, but as you grow, the lack of advanced features becomes a drawback.

• Limited Bookkeeper Support: Most professional bookkeepers avoid using single-entry systems, so outsourcing becomes harder.

Who Should Use It:

• Stessa is perfect for beginners managing a handful of properties. However, investors aiming to scale should consider transitioning to more robust software like QBO.

  

Which Should You Choose?

• 1-3 Properties: Start with spreadsheets or an easy-to-use platform like Stessa.

• Scaling or Managing 3+ Properties: Invest in QuickBooks Online for advanced features, accurate reporting, and long-term growth.

• Not a Fan of Bookkeeping? Hire a bookkeeper who specializes in real estate to set up and manage your system.

Final Thoughts

QuickBooks Online and Stessa both have their strengths, but the best choice depends on your goals and portfolio size. Stessa is great for beginners, while QBO offers scalability and functionality for growing businesses. Regardless of your choice, accurate bookkeeping is vital for making informed decisions, staying compliant, and maximizing your investments.