What is the best free accounting software for landlords?

Stessa is the best free accounting software for landlords with small portfolios. The free Essentials plan includes: automatic income and expense tracking via bank connections, performance metrics and cash flow reporting, receipt scanning and storage, Schedule E tax report generation, and property-level financial statements. Limitations of the free plan: no rent collection features, limited portfolio size, and single-entry bookkeeping only. For landlords with 1-10 units who handle their own bookkeeping, Stessa free tier is sufficient. Once you need advanced features like automated rent collection, tenant screening, or double-entry accounting, consider Stessa Manage ($12/month), Landlord Studio ($12/month), or Baselane (free banking with accounting).

How do landlords report rental income on taxes?

Landlords report rental income and expenses on Schedule E (Form 1040), Supplemental Income and Loss. For each rental property, report: gross rents received (line 3), expenses by category (advertising, insurance, repairs, taxes, utilities, depreciation), and net income or loss per property. Key Schedule E expense categories include: mortgage interest, property taxes, insurance, repairs and maintenance, utilities paid by landlord, property management fees, legal and professional fees, and depreciation. Depreciation is reported on Form 4562 and transferred to Schedule E line 18. Residential property depreciates over 27.5 years. Passive activity loss rules may limit losses you can deduct—see Form 8582 if rental losses exceed $25,000 annually.

What is the difference between Stessa and Buildium?

Stessa and Buildium serve different landlord profiles. Stessa is designed for DIY landlords with small portfolios (1-50 units) who self-manage properties. Stessa focuses on accounting and financial tracking: income/expense tracking, tax prep (Schedule E), performance metrics, and receipt capture. Stessa pricing: Free (basic), $12/month (Manage), $28/month (Pro). Buildium is designed for professional property managers and landlords with larger portfolios who need full property management features beyond accounting. Buildium includes: accounting plus tenant screening, online rent collection, lease management, maintenance requests, and vacancy marketing. Buildium pricing: $62/month (Essential), $192/month (Growth). Choose Stessa if you primarily need accounting and tax prep. Choose Buildium if you need a complete property management platform with accounting included.

How do landlords track depreciation on rental property?

Landlords track depreciation by calculating the annual deduction for the buildings cost (not land) over the IRS-specified recovery period. For residential rental property, the recovery period is 27.5 years using straight-line depreciation. Calculation: (Building cost / 27.5 years) = annual depreciation deduction. Example: Property purchased for $275,000 with $55,000 allocated to land. Building value = $220,000. Annual depreciation = $220,000 / 27.5 = $8,000/year. Report depreciation on Form 4562 and transfer to Schedule E line 18. Landlord accounting software like Stessa, Landlord Studio, and Buildium automatically calculate and track depreciation based on property purchase price and in-service date. When you sell the property, depreciation taken reduces your cost basis (depreciation recapture taxed at 25%).

Can landlords use QuickBooks for rental properties?

Yes, landlords can use QuickBooks Online for rental property accounting, but it requires customization since QuickBooks is designed for businesses, not real estate investors. Setup for landlords: Use QuickBooks Plus ($90/month) or higher for Class Tracking (essential to track income/expenses by property). Create a "Class" for each rental property. Set up expense categories matching Schedule E (repairs, insurance, taxes, etc.). Manually track depreciation or use third-party integration. Limitations: QuickBooks lacks property-specific features like depreciation calculation, tenant tracking, lease management, and Schedule E report generation. No integration with tenant screening or rent collection. For landlords with 1-3 properties who already use QuickBooks for a business, adding rental tracking may work. For dedicated rental accounting, Stessa (free) or Landlord Studio ($12/month) are more efficient and less expensive than QuickBooks Plus.

What expenses can landlords deduct from rental income?

Landlords can deduct all ordinary and necessary expenses for managing rental property on Schedule E. Common deductible expenses include: Mortgage Interest (largest deduction for most landlords), Property Taxes (real estate taxes paid to local government), Insurance (landlord insurance, liability coverage, flood insurance), Repairs and Maintenance (fixing broken items, painting, cleaning between tenants), Property Management Fees (if you hire a manager, typically 8-10% of rent), Utilities (if paid by landlord—water, trash, electric), Advertising (vacancy listings, signage), Legal and Professional Fees (eviction costs, CPA fees, attorney fees), Travel (mileage to property for inspections at 67 cents/mile for 2024), and Depreciation (building cost spread over 27.5 years). Not deductible: improvements that add value (must be capitalized and depreciated), personal time spent managing property, and fines or penalties.

What features should landlord accounting software have?

Essential landlord accounting software features include: Property-Level Tracking (separate income/expense reporting for each rental unit—critical for Schedule E and analyzing property performance), Bank Account Integration (automatic import of transactions from bank accounts and credit cards), Expense Categorization (categories aligned with IRS Schedule E: repairs, insurance, taxes, mortgage interest, depreciation), Depreciation Tracking (automatic calculation based on purchase price and placed-in-service date), Receipt Capture (mobile app to photograph and store receipts for audit protection), Tax Report Generation (Schedule E ready reports for tax filing or CPA handoff), and Financial Reporting (profit/loss by property, cash flow statements, portfolio overview). Nice-to-have features: rent collection and tracking, tenant management, lease storage, mileage tracking for property visits, and integration with accounting software like QuickBooks.

Best Landlord Accounting Software 2025

Track rental income by property, maximize deductions, and generate Schedule E tax reports. Compare Stessa, Buildium, AppFolio, and Landlord Studio for real estate investors.

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Why Landlords Need Specialized Accounting Software

Rental property accounting differs fundamentally from business accounting. Landlords report income and expenses on Schedule E (Form 1040), not Schedule C like freelancers or Form 1120 like corporations. This requires tracking finances property-by-property—each rental gets its own column on Schedule E.

The biggest landlord-specific tax benefit is depreciation. Residential rental buildings depreciate over 27.5 years, providing a significant non-cash deduction each year. A $220,000 building generates $8,000 in annual depreciation deductions without any out-of-pocket cost.

General accounting software like QuickBooks requires extensive customization to handle property-level tracking, depreciation, and Schedule E reporting. Purpose-built landlord software handles these requirements automatically.

Key landlord accounting requirements:

Property-level tracking—separate income/expenses for each rental unit
Schedule E categories—expenses aligned with IRS form (repairs, insurance, taxes, etc.)
Depreciation tracking—27.5-year residential, with Form 4562 support
Passive loss rules—track losses limited by $25,000 active participation threshold
Tax-ready reports—generate Schedule E data for CPA handoff

Landlord Accounting Software Comparison

Compare the best accounting tools for rental property owners by portfolio size and feature needs.

BEST FOR DIY LANDLORDS

Stessa

Best for: DIY landlords with small portfolios

Pricing:Free (Essentials), $12/mo (Manage)

Schedule E:Yes - auto-generated

Depreciation:Automatic tracking

Key Features:

Free tier for basic rental accounting
Automatic bank account sync
Property-level income/expense tracking
Schedule E tax report generation
Receipt scanning and storage
Performance metrics dashboard

Limitations:

•No rent collection on free plan
•Single-entry bookkeeping only
•Limited property management features

Buildium

Best for: Professional property managers

Pricing:$62/mo (Essential), $192/mo (Growth)

Schedule E:Yes

Depreciation:Supported

Key Features:

Full property management + accounting
Online rent collection with tenant portal
Tenant screening and lease management
Maintenance request tracking
Vacancy marketing integration
Owner and tenant communication tools

Limitations:

•Higher price point for small portfolios
•More features than DIY landlords need
•No free tier available

Landlord Studio

Best for: Mobile-first landlords

Pricing:$12/month (Pro)

Schedule E:Yes

Depreciation:Automatic calculation

Key Features:

Excellent mobile app for on-the-go tracking
Bank feed integration (smart rules)
Receipt capture with OCR
Mileage tracking for property visits
Schedule E and reports
Multi-property dashboard

Limitations:

•No tenant screening included
•Limited rent collection features
•Smaller user community than Stessa

AppFolio

Best for: Large portfolios (50+ units)

Pricing:Contact for quote (enterprise)

Schedule E:Yes

Depreciation:Full tracking

Key Features:

Enterprise-grade property management
Trust accounting for compliance
Automated billing and late fees
Comprehensive financial reporting
Marketing and leasing tools
Scalable for growth

Limitations:

•Overkill for small landlords
•Pricing not transparent
•Requires onboarding and setup

Zera Books

Best for: Accountants serving landlord clients

Pricing:$79/month unlimited

Schedule E:Export to accounting software

Depreciation:Not applicable (document processing)

Key Features:

AI-powered bank statement processing
Convert rental account PDFs to Excel/QuickBooks
Auto-categorize by expense type
Process unlimited landlord client statements
Direct QuickBooks and Xero integration
Multi-client dashboard for bookkeepers

Limitations:

•Not a complete landlord accounting system
•Focused on document processing automation
•Best as complement to landlord software

Schedule E Expense Categories

Landlord accounting software should categorize expenses to match IRS Schedule E lines for seamless tax prep.

Line 12

Mortgage Interest

Interest paid on loans used to acquire or improve rental property. Often the largest deduction for leveraged landlords. Report on Schedule E line 12.

Line 16

Property Taxes

Real estate taxes paid to local government. State, county, and municipal property taxes are fully deductible. Report on Schedule E line 16.

Line 9

Insurance

Landlord insurance, liability coverage, flood insurance, and umbrella policies covering rental properties. Report on Schedule E line 9.

Line 14

Repairs & Maintenance

Costs to keep property in good working condition: plumbing repairs, painting, appliance fixes, cleaning between tenants. Report on Schedule E line 14.

Line 11

Management Fees

Property management company fees (typically 8-10% of rent), leasing fees, and professional property management costs. Report on Schedule E line 11.

Line 18

Depreciation

Annual deduction for building cost spread over 27.5 years (residential). Calculate on Form 4562 and transfer to Schedule E line 18.

How Rental Property Depreciation Works

Depreciation is a significant tax benefit for landlords—a non-cash deduction that reduces taxable income each year.

Example: 27.5-Year Residential Depreciation

Purchase Price$275,000

Land Value (not depreciable)-$55,000

Building Value (depreciable)$220,000

Recovery Period27.5 years

Annual Depreciation Deduction$8,000/year

Calculation: $220,000 ÷ 27.5 years = $8,000 annual deduction. Report on Form 4562 and transfer to Schedule E line 18. Note: Depreciation taken reduces cost basis when you sell (depreciation recapture taxed at 25%).

Software Recommendations by Portfolio Size

Match your software choice to the complexity of your rental portfolio.

1-5 Units

Stessa Free or Landlord Studio

Simple accounting needs, cost-sensitive, DIY management. Free tools provide all essential features without monthly fees.

Budget: $0-15/mo

5-20 Units

Stessa Pro or Landlord Studio Pro

Growing portfolio needs better reporting and automation. Paid tiers unlock advanced features while remaining affordable.

Budget: $15-50/mo

20-50 Units

Buildium Essential

Portfolio size justifies property management features. Rent collection, tenant portal, and maintenance tracking become valuable.

Budget: $62-150/mo

50+ Units

AppFolio or Buildium Growth

Enterprise needs require scalable platform with trust accounting, team access, and comprehensive management tools.

Budget: $200+/mo

Landlord Accounting Best Practices

Follow these practices to maximize deductions, stay organized, and simplify tax season.

Track Income and Expenses by Property

Set up separate tracking for each rental unit, even if they share a bank account. Property-level tracking is required for Schedule E (one column per property) and helps identify which properties are profitable vs underperforming.

Connect Bank Accounts for Auto-Import

Link your rental property bank accounts and credit cards to your accounting software. Automatic transaction import saves hours of manual entry and reduces missed expenses. Review and categorize weekly to stay current.

Photograph Receipts Immediately

Use your accounting app to capture receipts at the point of purchase. IRS requires documentation for expenses, and digital receipts stored in your accounting software provide audit protection. Do not wait until tax time to organize receipts.

Separate Repairs vs Improvements

Repairs (fixing broken items) are deductible in the current year. Improvements (adding value or extending life) must be capitalized and depreciated over time. New roof = improvement. Patching a leak = repair. Accounting software should distinguish these.

Track Mileage for Property Visits

Driving to your rental property for inspections, repairs, or tenant meetings is deductible at 67 cents per mile (2024). Use accounting software with mileage tracking or a separate app like MileIQ. Log purpose, date, and miles for each trip.

Generate Schedule E Reports Before Tax Season

Run Schedule E reports in January for the prior year. Review expense categories, verify depreciation calculations, and reconcile with bank statements. Provide clean reports to your CPA rather than boxes of receipts.

Frequently Asked Questions

Common questions about landlord accounting software answered.

Landlord accounting software is specialized financial management software designed for rental property owners to track income and expenses by property, generate Schedule E tax reports, and manage tenant rent payments. Unlike business accounting software (QuickBooks, Xero), landlord tools are built specifically for real estate investors and include: property-by-property income/expense tracking (essential when you own multiple units), automatic rent income recording with tenant payment tracking, expense categorization aligned with IRS Schedule E categories, depreciation tracking for buildings and improvements (27.5-year residential), and integration with bank accounts for automatic transaction import. Popular platforms include Stessa (free for small portfolios), Buildium ($62/month), AppFolio (enterprise), and Landlord Studio ($12/month).

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Automate Document Processing for Landlord Clients

If you manage bookkeeping for landlords, Zera Books converts bank statements and receipts to QuickBooks-ready format in seconds. AI auto-categorizes rental expenses. Unlimited processing, $79/month.

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