Vacation Rentals in AppFolio
Vacation Rentals in AppFolio
That’s right, AppFolio has officially added “Vacation” as a new property type. What features does this add? What does that mean for managing your vacation rentals in AppFolio? APM Help took a look at the new property type and worked with some of our clients to see what they think. Continue reading to learn more about moving your vacation rental accounting to AppFolio.
What does the property type change?
In short, nothing. This is pretty unfortunate, but it does allow you to separate your short-term vacation rentals from long-term rentals. However, we did notice that AppFolio had updated a few key features that have made vacation rentals such a headache in the past. We will cover those a little further down.
As far as reporting goes, you can easily see all of your properties in the Property Directory. If you Customize the report, you can also group it by “Property Type” which allows you to clearly see how many vacation rentals you have in comparison to your long-term rentals.
How can I track renters?
There are a couple of options here, but it depends on your preferences. These include:
- A new ledger/occupancy for each renter - AppFolio did update the system to allow for stacked future leases, which is good news for Vacation Rentals, but also Student Housing. Essentially, you would start a new move-in for each renter to set them up with an online portal where they can pay online. This is a great option if you’re not using a third-party to manage your rentals, like Airbnb or VRBO.
- A continuous ledger - No need to stack future tenants, and no move-ins. Just a single unit that has a continuous ledger for all renters. This is a better option for those who use third-party vacation rental apps.
<blog-cta>Have more questions about tracking renters? Let us help!<blog-cta>
What’s the best way to track the accounting?
Similar to occupancy tracking, there are a few options for tracking the accounting. However, it does depend largely on how you’re managing your vacation rentals. With apps like VRBO and Airbnb, you have to consider their fees without deducting them from the total short-term income for the property. On the other hand, if you manage your own properties, the accounting side is a bit more simple. Let’s take a look:
Option 1: Receipt + Credit - rentals with fees
- Charge full amount of vacation rental stay on the tenant ledger towards an income account like “Short-Term Rent”
- Record the actual income as a receipt on the tenant ledger to pay a portion of the charge, and then record a credit towards an income or expense* GL account (like “Vacation Rental Fees”) to record the rest of the payment without increasing the amount of cash on the property
*Whether you use an income or expense GL account depends on where you want it to show on the Income and Cash Flow Statements
Option 2: Receipt + Payable - rentals with fees
- Charge full amount of vacation rental stay towards the same type of income account (option 1)
- Record receipt for the full amount of stay on the ledger
- Record payable/other payment to show the fee to vacation rental software (Airbnb, VRBO, etc) towards the same GL account as the credit in option 1
Option 3: Receipt - rentals with fees
- Charge full amount of vacation rental stay towards the same type of income account as in option 1
- Record receipt for the full amount of stay on the ledger
- Record payable/other payment to show the fee to vacation rental software (Airbnb, VRBO, etc) towards the same GL account as the credit in option 1
Option 4: Receipt - rentals with fees
- These would be handled like any other ledger, but you would still want to use a separate Rental Income account to track short term versus long term income
- Charge the tenant ledger for the full amount of their stay
- Record the receipt. If you’re doing separate ledgers, renters can pay this online
<blog-cta>Need help figuring out which option is best for you? Reach out today!<blog-cta>
Should I use AppFolio to record all short-term rental accounting?
In our opinion, If you run your vacation rentals through larger software like Airbnb, VRBO, then use that for scheduling and overall accounting. You should only record something in AppFolio if the funds are touching the Trust Account. Most of the time, these funds won’t come into the Trust Account unless you're managing a short-term rental for another owner or company.
If you are managing the vacation rental on behalf of another owner, then the funds will most likely go into your Trust Account so you can collect management fees like a long-term rental and provide the owner with their portion.
Ultimately, how you track your short-term rental accounting is up to you and is largely determined by the kind of reporting you are trying to generate and where the short-term rental income is being deposited.
Still have questions on managing vacation rentals in AppFolio?
Reach out to APM Help anytime at info@apmhelp.com or call us at 281-949-8755.
Vacation Rentals in AppFolio
That’s right, AppFolio has officially added “Vacation” as a new property type. What features does this add? What does that mean for managing your vacation rentals in AppFolio? APM Help took a look at the new property type and worked with some of our clients to see what they think. Continue reading to learn more about moving your vacation rental accounting to AppFolio.
What does the property type change?
In short, nothing. This is pretty unfortunate, but it does allow you to separate your short-term vacation rentals from long-term rentals. However, we did notice that AppFolio had updated a few key features that have made vacation rentals such a headache in the past. We will cover those a little further down.
As far as reporting goes, you can easily see all of your properties in the Property Directory. If you Customize the report, you can also group it by “Property Type” which allows you to clearly see how many vacation rentals you have in comparison to your long-term rentals.
How can I track renters?
There are a couple of options here, but it depends on your preferences. These include:
- A new ledger/occupancy for each renter - AppFolio did update the system to allow for stacked future leases, which is good news for Vacation Rentals, but also Student Housing. Essentially, you would start a new move-in for each renter to set them up with an online portal where they can pay online. This is a great option if you’re not using a third-party to manage your rentals, like Airbnb or VRBO.
- A continuous ledger - No need to stack future tenants, and no move-ins. Just a single unit that has a continuous ledger for all renters. This is a better option for those who use third-party vacation rental apps.
<blog-cta>Have more questions about tracking renters? Let us help!<blog-cta>
What’s the best way to track the accounting?
Similar to occupancy tracking, there are a few options for tracking the accounting. However, it does depend largely on how you’re managing your vacation rentals. With apps like VRBO and Airbnb, you have to consider their fees without deducting them from the total short-term income for the property. On the other hand, if you manage your own properties, the accounting side is a bit more simple. Let’s take a look:
Option 1: Receipt + Credit - rentals with fees
- Charge full amount of vacation rental stay on the tenant ledger towards an income account like “Short-Term Rent”
- Record the actual income as a receipt on the tenant ledger to pay a portion of the charge, and then record a credit towards an income or expense* GL account (like “Vacation Rental Fees”) to record the rest of the payment without increasing the amount of cash on the property
*Whether you use an income or expense GL account depends on where you want it to show on the Income and Cash Flow Statements
Option 2: Receipt + Payable - rentals with fees
- Charge full amount of vacation rental stay towards the same type of income account (option 1)
- Record receipt for the full amount of stay on the ledger
- Record payable/other payment to show the fee to vacation rental software (Airbnb, VRBO, etc) towards the same GL account as the credit in option 1
Option 3: Receipt - rentals with fees
- Charge full amount of vacation rental stay towards the same type of income account as in option 1
- Record receipt for the full amount of stay on the ledger
- Record payable/other payment to show the fee to vacation rental software (Airbnb, VRBO, etc) towards the same GL account as the credit in option 1
Option 4: Receipt - rentals with fees
- These would be handled like any other ledger, but you would still want to use a separate Rental Income account to track short term versus long term income
- Charge the tenant ledger for the full amount of their stay
- Record the receipt. If you’re doing separate ledgers, renters can pay this online
<blog-cta>Need help figuring out which option is best for you? Reach out today!<blog-cta>
Should I use AppFolio to record all short-term rental accounting?
In our opinion, If you run your vacation rentals through larger software like Airbnb, VRBO, then use that for scheduling and overall accounting. You should only record something in AppFolio if the funds are touching the Trust Account. Most of the time, these funds won’t come into the Trust Account unless you're managing a short-term rental for another owner or company.
If you are managing the vacation rental on behalf of another owner, then the funds will most likely go into your Trust Account so you can collect management fees like a long-term rental and provide the owner with their portion.
Ultimately, how you track your short-term rental accounting is up to you and is largely determined by the kind of reporting you are trying to generate and where the short-term rental income is being deposited.
Still have questions on managing vacation rentals in AppFolio?
Reach out to APM Help anytime at info@apmhelp.com or call us at 281-949-8755.
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