Cash vs. Accrual Accounting for Landlords

By PropsManager Team | Dec 17, 2025

Cash vs. Accrual Accounting for Landlords

When setting up your books for your rental business, you have two main choices: Cash basis or Accrual basis.

Cash Basis Accounting

This is the most common method for small landlords.

• Income: Recorded when you actually receive the money.
• Expenses: Recorded when you actually pay the bill.
• Pros: Simple, easy to track cash flow.
• Cons: Doesn't give a long-term view of profitability if payments are delayed.

Accrual Basis Accounting

• Income: Recorded when it is earned (e.g., rent is due on the 1st, even if paid on the 5th).
• Expenses: Recorded when the obligation is incurred (e.g., when the plumber sends the invoice, not when you write the check).
• Pros: More accurate picture of financial health.
• Cons: More complex, requires tracking accounts receivable/payable.

Which Should You Choose?

For most independent landlords with a few units, Cash Basis is sufficient and easier to manage. However, if you have a large portfolio or complex financing, Accrual might be required.

Conclusion

Whichever method you choose, consistency is key. PropsManager supports financial tracking to help you stay organized regardless of your accounting method.