Rent Received: Revenue vs Net Income
In REI Hub, you will typically record your rents using either the Revenue or Net Income transaction types:
Note: If you are subscribed to REI Hub through an integrated rent collection partner, your rents will already be recorded via the integration. Utilize the partner deposit transaction type instead to ensure your rents are not double-recorded.
If the deposit amount is the same as the rent amount, select the Revenue transaction type. Alternatively, if the transaction is nothing but rent, use the Revenue transaction type.
When booking deposits from the Import Feed, the 'Rent' account will be pre-selected, and you will only need to specify the property or unit for which this rent was received.
If the deposit represents both rent and expense(s), select the Net Income transaction type. Net Income reports both revenue and expense lines as part of the same transaction.
So, if the deposit is from a property manager who collected rent, charged you management fees, and then disbursed the net amount to you, you should use the 'Net Income' transaction type.
For example, if a property manager collects rents of $1,400 on your behalf and charges you management fees of $140, they would only send you the net amount after withholding their fee, or $1,260.
To book the $1,260 deposit in your import feed, you would:
- Click Book and select the Net Income transaction type
- Select the appropriate property/unit
- In the Revenues box, select the Rent account and enter $1,400 as the amount
- In the Expenses box, select the Management Fees account and enter $140 as the amount
- Click 'Save Net Income' at the bottom
This will record your gross revenues ($1,400) and gross expenses ($140) in one transaction without having to split it. The IRS prefers that you report your gross revenues and expenses, not just the net.
The REI Hub system will not automatically determine the gross rent and gross expenses reflected in the net deposit—you will need to enter the appropriate accounts and amounts in the Revenues and Expenses boxes.
Please reach out to the REI Hub support team with any questions!