Property Management and Property Maintenance
I have owned and operated a small 'Property Maintenance' business for the past 12 years, offering lawn care, snow removal and housekeeping services.
Recently I purchased 2 rental properties. These are short term rentals with various rents being collected several times each month.
I am wondering how to organize these two businesses. I would love to account for all my expenses and revenues for both ventures under the same accounting software and using the same bank account to avoid creating more work. Is this advised or should I be keeping the two separate?
I also accept credit cards through the Property Maintenance and would love to offer this to the rentals also without opening a second merchant account.
It is also worth mentioning that I currently have one of my employees doing work for both 'businesses' (The property maintenance business is a registered business).
Any advice on the matter would be helpful.
I don't give advice on this site but I'll share my thoughts and provide some information*.
I guess my first question is, are you using/advertising the same business name for your property rentals? If yes, then you most certainly can account for both divisions under one set of books. Whose name did you use when you purchased the properties? You didn't mention your business structure.
If you purchased your properties under your name but want to operate the rentals under you current business, I'm thinking you'll have to hire your business to act as the property manager(s). I'd seek professional advice for your specific situation if this is the case.
If you go the route of tracking everything under one business, in QuickBooks use classes to track the profitability of each division/arm separately.
If you are operating your property rentals under a different business name, I think I would check with a lawyer to see if you can utilize "dba" (doing business as). Failing that, I would check with CRA.
I like to organize things as clean and simple as possible. For me that would be, one business name with two divisions/arms. These things can get messy if the paperwork isn't/wasn't don't properly though. One thing for sure ... CRA is a lot nicer to you when you keep all your ducks in a row ... no cherry picking.
For tax purposes, rental properties use a different tax schedule ... so like I said, make sure you get all your ducks in a row before the end of the year while your accountant / lawyer still has some flexibility in coming up with your options unique to your situation.
If you don't have an accountant (CA or CGA), it really would be worth your while to even consult once on how to best set things up for ease of bookkeeping and maximizing your tax deductions while minimizing your expenses.* I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.