A question comes up somewhat frequently. Frequently enough we wanted to post it up to the Blog with a good well explained answer to help us answer the question better for all users.
Question: I posted a tenant rent payment of $1000 to the tenant to offset their rent and their account balance is now zero; however, the property account shows positive $1000, why is that?
Answer: The tenant was charged $1000 rent which made their account -$1000. When the $1000 is posted it accurately sets the tenant balance to $0. The property itself on the other hand was not charged rent, it therefore only receives the income from rent during this transaction. This is functioning as intended.
Now to answer this in a bit more detail, because it can become bit complicated.
One of the easiest ways to think about the Property “account” is to think of it as your own personal bank account just for that individual property (or unit). Even if you don’t maintain separate bank accounts per property, this ledger is the equivalent of that. Now we don’t charge the property itself rent, so if the only transactions entered into Rentec Direct are rent charges and payments this property account will do nothing but receive income and the balance will grow consistently. In this instance, the property account ledger will have little use to you and can probably safely just be ignored.
If you use Rentec Direct to also keep track of your expenses for the property, these expenses will offset some of the income. For instance, $1000 rent income minus a $800 mortgage and $100 maintenance/utilities will then only be $100 per month positive growth on the account. If you then link the property (Properties, Edit Property) to an actual bank account (Settings, Setup Bank Accounts), all these transactions will also post into the bank account, and net out to a $100 positive increase in the bank account.