What a real estate bookkeeper's monthly fee is actually paying for

Question

For someone whose own small business books take an afternoon a month, a quoted rate like $350 a month for two rental doors can sound high for what seems like downloading a bank feed and clicking categories. The real estate version of bookkeeping differs in a few specific ways. Depreciation schedules themselves are typically a tax return function handled by a CPA in the spring, not part of the monthly bookkeeping work, so that alone doesn't explain the fee. What does is the ongoing tracking that feeds the CPA's work: separating capital improvements from repairs at the time they happen rather than reconstructing them later, tracking security deposits as liabilities rather than income, allocating expenses correctly across multiple properties, reconciling mortgage escrow accounts, and producing a clean profit and loss by property that a lender or a CPA can use without cleanup. A monthly rate is generally buying judgment about categorization, not just labor, since a $2,100 check could be a repair, a capital improvement, or a security deposit refund, and getting that classification wrong at the time it happens creates real cleanup cost later. For two doors, $350 a month is on the higher end of typical small-portfolio pricing, and it's reasonable to ask directly what's included, particularly whether capital versus repair classification and multi-property allocation are part of the service.

Rena Guide · Accepted Answer

You're mostly buying judgment, and the depreciation point your friend made is half right.

Depreciation is the accounting rule that spreads the cost of a building over many years instead of expensing it all at once. The actual calculation usually lands on the tax return, so your CPA is the one who does it. What the monthly bookkeeper does is keep a clean list of the things that will eventually feed that calculation. When you spend $2,100, someone has to decide whether it's a repair that hits this year's expenses or an improvement that gets added to the property's cost and depreciated. A general bookkeeper who doesn't work in real estate will often dump both into "maintenance" and nobody notices until your CPA is trying to reconstruct a year of receipts in March.

So the monthly work on two doors is roughly: pull in bank and card activity, split every dollar to the right property rather than to a company-wide bucket, code security deposits as money you owe back rather than income, reconcile each account to the statement so nothing is missing or doubled, and hand you a profit and loss per property.

The part people don't think to ask about is who owns the file. Ask whether the QuickBooks or Xero subscription is in your name with you as an admin, and get the answer in writing. Plenty of people discover at the end of a relationship that their books live inside someone else's account. Also ask what happens when you buy a third property, because per-door pricing and flat pricing behave very differently at scale.

tonyv88 · Answer

The security deposit line in that answer is the one that bites people. Owner statements regularly show a deposit booked as rent income, so the P&L looks fifteen hundred dollars better than reality and then there is a hole when the tenant moves out. On two doors that gets caught. On twenty it usually does not.

mitchell_ray4 · Answer

Coming from the tools side, the repair vs improvement call is genuinely hard from the invoice alone. My invoice for a water heater swap says "water heater replacement, $1,400" and nothing about whether that was a full unit or a repair on the existing one. If your bookkeeper is only reading invoices, they're guessing. Somebody has to tell them what actually happened at the property.

aliyah_b · Answer

$350 for two doors works out to $2,100 a year, which is real money against a rental that might clear $300 a month. I'd want to know what the same person charges at five doors before signing, because if it's still $350 the price makes a lot more sense in a year.

derekj19 · Answer

On the file ownership point, I've seen the reverse problem too. Owner holds the subscription, bookkeeper leaves, and nobody in the office knows the chart of accounts logic the last person invented. There were twelve variations of "repairs" by property nickname. Ask for a written note on how the accounts are structured, not just the login.

nataliehsu · Answer

Does the $350 include talking to your CPA, or is that billed separately? Thatch, that's the question I'd send back first.

angela_burke · Answer

Plumb's question is the right one and the answer is usually no. The year-end handoff is its own scope, because the CPA sends back adjustments and someone has to enter them so next year's opening balances match the return. If nobody does that, the books and the tax return drift apart and by year three you cannot reconcile them at all. Ask specifically whether closing entries after the return are included or billed hourly.

What a real estate bookkeeper's monthly fee is actually paying for

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