How do I set up Quickbooks for a small property rental company that holds its properties in separate LLC's? [closed]

Question

My company is set up so that it has a Property Management LLC (PM), Property Holdings LLC (PH) and several real estate assets, each of which is held by the PH but is also its own LLC (props). It was explained to me that this structure limits liability. But it also seems to make setting up Quickbooks very awkward and complex.

How should I set up the Quickbooks for all of these linked LLC's? Currently, payroll for permanent employees comes out of PM, real estate assets are held by PH, and utilities are billed to the props. Labor is billed to the PM because it holds the insurance policies.

I'm really confused about how to do the books, very new to this and, although my background is a hybrid of technical and policy, which makes it easy for me to learn and adapt to the business world, I have little practical experience with finance.

Answer 1

You need one "company file" for each company that you want to track through QuickBooks. Looks like, in your case, that is at least the PM and the PH (as you labeled them in your question). The companies that just hold property and pay utilities might be simple enough that you don't need the full power of QB, in which case you might just track their finances on a spread sheet. Subsidiary companies will probably appear as "assets" of some sort on the books of the parent company.

This set-up probably does limit liability at some level, but it's going to create a lot of overhead for your that incurs some expense either in your time or in actual fees paid. You should really consider whether the limitations on liability balance against those costs. (Think ahead to what you're going to do when you have to file taxes on this network of companies, whether you need separate insurance policies for each instead of getting one policy covering multiple properties, etc.)