The rental bookkeeping checklist: monthly, quarterly, yearly

At one or two rentals, bookkeeping is a shoebox and a good memory. Around the third or fourth, the shoebox stops working, and it usually fails in February when your CPA asks a question you can't answer.

This is the routine that holds up as the portfolio grows: a few things you set up once, a short monthly pass, a quarterly review and a year-end close.

Set up once

• Open a separate bank account for the rentals. One per LLC if you hold properties in different entities. Personal and rental money in one account is the root of most cleanup jobs.
• Use one card for rental spend. One card means one statement to reconcile, and it keeps the grocery run off Schedule E.
• Decide how you'll tag properties. Every transaction gets a property, and a unit if the building has more than one. Pick the names now and keep them consistent.
• Use the Schedule E line items as your categories. Advertising, cleaning and maintenance, insurance, mortgage interest, repairs, supplies, taxes, utilities, management fees and so on. If your categories already match the form, the return is mostly done.
• Record each purchase properly. That means the closing statement mapped to basis, deductions and escrow, plus the land and building split and the placed-in-service date. Where every line on your closing statement goes covers the mapping.
• Write a de minimis policy. Expense anything up to $2,500 per invoice or item. It has to be in place at the start of the year, so write it once and keep it.

Every month

• Categorize every transaction and tag it to a property. Do it while you still remember what the $340 at Home Depot was for.
• Decide repair or improvement when the money is spent. A repair is deducted this year. An improvement is capitalized and depreciated. The three safe harbors explains where the line falls.
• Attach the receipt or invoice. A bank line shows what you paid, not what you bought. Snap a photo the day you pay.
• Check rent received against your rent roll. Every unit, every month. A missed payment you don't notice is a late fee you never charge.
• Split each mortgage payment. Record principal, interest and escrow separately. Only the interest, and the taxes and insurance paid from escrow, are deductible.
• Keep security deposits off income. Record them as money you owe the tenant until you keep any of it.
• Record owner contributions and draws as equity. Money you move in or out isn't income or an expense.
• Log mileage and hours as you go. If you drive to a property or work on an STR, write it down the same day. A log rebuilt from memory doesn't hold up.
• Reconcile each account to its statement. The books should match the bank to the penny.

Every quarter

• Review profit and loss by property. You're looking for the property that's quietly losing money, not the portfolio total.
• Compare against the same quarter last year. Utilities up 40% is a leak or a rate change, and either one is worth knowing about.
• Pay estimated taxes. The due dates are April 15, June 15, September 15 and January 15.
• Check repair spend per building against the small taxpayer ceiling. That's the lesser of $10,000 or 2% of the building's unadjusted basis. Know where you are before the fourth quarter.
• Check vacancy and turnover. Days vacant per unit tells you more about a property than the rent does.

Every year

• Close the books by the end of January. Categorize and reconcile December, then lock the year so nothing changes after your CPA has it.
• Send out 1099s. For payments made in 2026, contractors you paid $2,000 or more by check or bank transfer get a 1099-NEC by January 31. Payments by card or payment app don't need one.
• Check your Form 1098s against your books. Mortgage interest on the form should match what you recorded.
• Update the depreciation schedule. Add new purchases and capitalized improvements, with their dates. Remove anything sold.
• Build the CPA packet. It should have a P&L and balance sheet per property, the depreciation schedule, closing statements for buys and sales, 1098s and 1099s, and STR hour logs. The before-December-31 checklist covers what to settle before the year ends.

Records to keep

• Ordinary records: at least three years after you file the return they support.
• Property basis records: purchase documents, improvements and depreciation, kept until three years after you file the return for the year you sell. For a long hold, that can be decades.
• Hour and mileage logs: as long as the return that relies on them.

The monthly pass takes about 20 minutes per property if you do it every month. Left until year end, it takes a weekend per property, and you'll still miss things.

This is general information, not tax advice. Thresholds, elections and dollar figures change, and the right treatment depends on your situation, so check with a CPA before you act on any of it.