REI Hub makes it easy to track your Fixed Assets and Accumulated Depreciation. Fixed assets include your rental property and capital improvements you make to it (such as a substantial renovation or a new HVAC system). After a fixed asset has been set up, you can book depreciation against it.
Some Important Things to Know
At this time, depreciation is automatically calculated in REI Hub based on the transaction(s) in the fixed asset, but the system does not automatically enter it on your behalf.
Tracking fixed assets in REI Hub is optional, and not utilizing fixed assets will not harm your ability to keep your Net Income (profit & loss) or Schedule E books. You can enter an uncategorized depreciation expense without creating a specific fixed asset. However, if you are not tracking your fixed assets and depreciation, ensure your CPA or tax preparer is on your behalf!
There are multiple types of fixed assets. Your investment property is a Fixed Asset, but so is a roof replacement after you've already owned the property for three years. Even though they are both Fixed Assets, they will be depreciated on different timelines. Many of the fields are optional, so you can create the asset with the information you have at hand and update it later.
To Add Basis for Your Properties:
Follow the The Property Purchase Journal Entry for Recent Acquisitions article if you purchased the property within the timeframe you're tracking in REI Hub
Follow the Adding Property Basis for Past Acquisitions article if you purchased the property previously and have already had basis calculated, and you need a summation entry for the basis.
To Add a New Fixed Asset
1) Navigate to the Fixed Assets page and click Add Asset
From the Fixed Assets page, found under the Organization tab in the left side menu, click Add Asset in the top right corner.
2) Select "A Property" when choosing what type of fixed asset
3) Select which property you are adding as an asset from the dropdown menu
4) Select if the property is commercial or residential
In REI Hub, residential properties depreciate over a 27.5-year lifespan, while commercial properties depreciate over a 39-year lifespan. If needed, this can be edited once the fixed asset is created.
5) Enter the Placed in Service Date
The placed in service date is when the property was first listed for rental. You can also leave it blank for now and fill it out later by editing the fixed asset account.
6) View details, Edit, and Add Transactions from the specific Fixed Asset page
Tips for Fixed Assets
As mentioned above, use the fixed asset purchase transaction type to book purchases, payments, and expenses associated with a fixed asset. Do not use the Expense transaction type, which is tied to your operational P&L records.
Manual journals
Use the Manual Journal transaction type to enter property purchases and/or loan origination transactions that occur during your current bookkeeping period.
If the purchase occurred prior to the current period, you can add property basis for past acquisitions or we recommend you use the opening balance feature.
Use the Opening Balance transaction type when transitioning from another accounting system. The Closing Balance from your previous system provides the Opening Balance for REI Hub. Click on "add transaction" in the top right of the fixed asset to enter an opening balance.
Entering Depreciation to Fixed Assets
Use the Depreciation transaction type to book depreciation against a fixed asset. Currently, REI Hub automatically calculates depreciation on a straight-line basis, but it does not enter these values in the system automatically. Read more on how to enter depreciation for specific fixed assets in REI Hub.
If you are working with a CPA or tax preparer, they will likely provide you with a depreciation number. You can enter that depreciation value as an uncategorized deprecation entry.
Still have questions? Reach out to our Support Team via email at [email protected] or call us at (888)939-6865.