How to Utilize Tracking Software for Expenses: A Landlord's Complete Guide

By PropsManager Team · Software Comparison · Apr 15, 2025

I once spent an entire weekend in March hunched over my kitchen table, sorting through a literal shoebox of crumpled receipts, trying to piece together a year's worth of expenses across four rental properties. My wife walked in, looked at the chaos, and said, "There has to be a better way."

She was right. That year I missed roughly $3,200 in legitimate deductions because I couldn't find receipts for plumbing repairs, couldn't remember which property a $475 appliance purchase belonged to, and flat-out forgot about a $900 landscaping contract I'd paid in cash. That was the last year I did it the old way.

If you're still tracking rental expenses with spreadsheets, envelopes of receipts, or — worst of all — nothing at all, this guide is going to change how you run your business. Because that's what rental property ownership is: a business. And businesses that don't track their money don't survive.

Why Every Landlord Needs Expense Tracking Software

Here's a number that should wake you up: the IRS estimates that small business owners overpay their taxes by an average of $12,000 per year simply because they fail to claim deductible expenses. Landlords are some of the worst offenders. Between driving to properties, buying materials at Home Depot, paying contractors, and covering insurance premiums, the deductible expenses pile up fast — and they're incredibly easy to lose track of.

Manual tracking methods fail for three reasons:

1. They're slow. Entering every transaction by hand into a spreadsheet takes hours each month.
2. They're error-prone. One mistyped number or forgotten receipt and your books are off.
3. They don't scale. Managing two properties with a spreadsheet is annoying. Managing ten is impossible.

Expense tracking software solves all three problems. It automates data entry, catches errors before they compound, and works just as well for a 50-unit portfolio as it does for a duplex. The ROI isn't theoretical — it's immediate and measurable.

The Real Cost of Poor Expense Tracking

Let me break down what bad tracking actually costs a typical landlord with five rental units:

• Missed deductions: $2,000–$5,000/year in overlooked expenses
• Accountant fees: An extra $500–$1,500/year because your CPA has to untangle your records
• Time waste: 8–15 hours per month on manual bookkeeping
• Audit risk: Disorganized records increase your chances of an IRS audit — and losing one

Add it all up and you could be throwing away $5,000 to $10,000 annually. That's a new HVAC system. That's three months of mortgage payments on a rental. That's real money you're leaving on the table.

Setting Up Your Expense Tracking System

Getting started with expense tracking software isn't complicated, but doing it right from day one saves you massive headaches later. Here's how I recommend approaching it.

Step 1: Choose Software That Understands Rental Properties

Generic accounting software like QuickBooks can work, but it wasn't built for landlords. You'll spend hours customizing categories, manually assigning expenses to properties, and wrestling with reports that don't match how rental businesses actually operate.

Purpose-built property management platforms like PropsManager integrate expense tracking directly with rent collection, lease management, and maintenance workflows. That means when a tenant submits a maintenance request and you pay a plumber $350, the expense automatically gets tagged to the right property, categorized as a repair, and shows up on your profit-and-loss report without you lifting a finger.

Step 2: Set Up Your Property Chart of Accounts

Before you log a single expense, configure your categories properly. Here's a standard chart of accounts for rental properties:

Getting these categories right upfront means your year-end reporting practically does itself. When April rolls around, you hand your accountant a clean report instead of a grocery bag full of receipts, and they charge you less. Win-win.

Step 3: Connect Your Bank Accounts and Credit Cards

This is the single most impactful step. Once you link your financial accounts to your tracking software, transactions flow in automatically. No more manual entry. No more forgotten expenses.

Most landlords I know use a dedicated business checking account and credit card for each property — or at minimum, one set of accounts for all rental activity separate from personal spending. If you're not doing this yet, stop reading and go open a business account. Seriously. Commingling personal and business funds is the fastest way to create a bookkeeping nightmare and invite IRS scrutiny.

With bank feeds connected, your workflow becomes:

1. Transaction appears in your software
2. You review and categorize it (often auto-categorized)
3. Attach a receipt photo if needed
4. Done

What used to take 15 minutes per transaction now takes 15 seconds.

Step 4: Digitize Every Receipt Immediately

Here's my rule: if the receipt isn't photographed within 60 seconds of the transaction, it's going to get lost. Period.

Good expense tracking software lets you snap a photo of a receipt with your phone and automatically matches it to the corresponding transaction. Standing in the plumbing aisle at Lowe's? Take the photo right at checkout. Paying a contractor? Photograph the invoice before you file it.

The IRS requires you to keep records of all business expenses, and in an audit, "I know I paid for it but I can't find the receipt" doesn't fly. Digital receipt storage means every receipt is searchable, organized, and backed up in the cloud. I've been through one audit in 15 years of landlording, and having everything digital made it almost painless. Almost.

Key Features to Look For in Expense Tracking Software

Not all tracking tools are created equal. After trying six different platforms over the years, here's what actually matters for landlords.

Per-Property Tracking

This is non-negotiable. Every single expense needs to be assignable to a specific property. When you run a profit-and-loss report for 742 Evergreen Terrace, you need to see only that property's numbers — not a jumbled mess of all your holdings.

PropsManager's expense tracking handles this natively. Every transaction, every receipt, every report can be filtered by property, making Schedule E preparation straightforward.

Automated Categorization

After you categorize a few transactions from the same vendor, smart software learns the pattern. Your monthly payment to ABC Landscaping? Automatically categorized as "Cleaning & Maintenance" and assigned to the correct property. The $47.83 charge at Home Depot? Flagged for your review since you shop there for multiple properties.

Mileage Tracking

The IRS standard mileage rate for 2025 is 70 cents per mile. If you drive 5,000 miles per year visiting properties, meeting contractors, and handling emergencies, that's $3,500 in deductions. But only if you track it.

Good software includes GPS mileage tracking that logs your trips automatically. Start tracking and you'll be amazed at how quickly those miles add up.

Receipt Scanning with OCR

OCR (Optical Character Recognition) technology reads receipt text and auto-fills the amount, date, and vendor. It's not perfect, but it's about 90% accurate and saves enormous time. You just verify and approve instead of typing everything manually.

Real-Time Reporting

Monthly profit-and-loss statements, year-to-date expense summaries, category breakdowns, year-over-year comparisons — you should be able to pull any of these in under 30 seconds. If generating a report requires exporting to Excel and spending an hour formatting data, your software isn't good enough.

Common Expense Tracking Mistakes Landlords Make

I've made most of these myself, so learn from my pain.

Mixing Personal and Business Expenses

I already mentioned this, but it bears repeating. Using your personal credit card for a $200 property repair seems harmless — until you're trying to separate 347 personal transactions from 52 business ones at year-end. Keep them separate. Always.

Forgetting Small Expenses

That $12 pack of light bulbs. The $8 parking fee when you visited a property downtown. The $35 in postage for mailing lease renewals. Individually they're nothing. Over a year, they add up to hundreds or thousands of dollars in missed deductions. Automated bank feeds catch these; manual tracking doesn't.

Not Tracking Mileage

I talked to a landlord last year who manages six properties across two counties and had never tracked a single mile. Conservative estimate? He was leaving $4,000+ per year in deductions on the table. Every year. For a decade. That's $40,000.

Waiting Until Tax Season

The landlords who succeed financially aren't the ones who scramble in March. They're the ones reviewing their numbers monthly. A quick 20-minute review at the end of each month catches miscategorized transactions, identifies unusual spending patterns, and keeps you informed about each property's actual profitability. If a property's expenses are creeping up, you want to catch that in February — not next April.

Ignoring Capital Expenditures vs. Repairs

This is a big one. A $150 faucet replacement is a repair — fully deductible in the current year. A $15,000 roof replacement is a capital expenditure — depreciated over 27.5 years. Categorize them wrong and you could either overpay taxes or trigger an audit. Your tracking software should let you flag capital expenditures separately and calculate depreciation automatically.

How Expense Tracking Integrates With Property Management

Standalone expense tracking is fine. Integrated expense tracking is transformational.

When your expense tracker lives inside your property management platform, the data connections multiply. Consider what happens in PropsManager:

• A tenant submits a maintenance request through the portal
• You approve the work and assign a vendor
• The vendor completes the job and you pay them
• The payment is automatically logged as an expense against that property
• The maintenance request is marked complete
• Your profit-and-loss report updates in real time

No duplicate entry. No manual categorization. No reconciliation headaches. The entire workflow from tenant complaint to financial record happens in one system.

This integration also makes it dead simple to calculate your net operating income (NOI) for each property. Rent collected minus operating expenses equals NOI. When all your income and expenses live in the same platform, that calculation is always current and always accurate. Investors and lenders love seeing clean NOI figures, and if you ever want to refinance or sell, you'll be glad you ran a tight ship.

Check out PropsManager's pricing to see how integrated expense tracking fits into different plan tiers.

Expense Tracking Checklist for Landlords

Use this checklist to make sure your setup is airtight:

• Dedicated business bank account(s) for rental activity
• Dedicated business credit card(s)
• Bank feeds connected to tracking software
• Property-specific chart of accounts configured
• Receipt scanning app installed on your phone
• Mileage tracking enabled
• Monthly review calendar reminder set
• Capital expenditure vs. repair classification rules understood
• Year-end reporting templates saved
• Accountant given read-only access to your platform

If you can check every box, you're ahead of 90% of landlords out there.

Scaling Your Portfolio Without Losing Control

Here's where expense tracking software really proves its worth. Going from 3 properties to 10 — or from 10 to 30 — doesn't mean 3x or 10x the bookkeeping work. With proper automation, adding a new property to your tracking system takes maybe 15 minutes of setup. After that, the software handles the heavy lifting.

I've seen landlords who manage 20+ units spend less time on their finances than owners of a single duplex who insist on doing everything manually. The difference isn't talent or work ethic. It's systems. Good systems multiply your capacity.

If you're planning to grow your portfolio, getting your expense tracking dialed in now — before you scale — will save you from having to retroactively organize years of financial records. Trust me on this. Retrofitting organized bookkeeping onto a messy portfolio is one of the most painful projects in real estate.

For more on keeping your rental finances organized, check out our guide on automating rent collection and our post on renovations that add the most value to rental properties. Both tie directly into how you manage and track your expenses. You might also find our property inspection guide useful — inspections often surface expenses you need to track.

Explore More PropsManager Resources

Looking for the right property management software? Check out our in-depth guides:

• Compare Property Management Software — See how PropsManager stacks up against Buildium, AppFolio, Rent Manager, and Propertyware.
• Software for Small Landlords — Built for landlords managing 1–50 units without the enterprise price tag.
• AI-Powered Property Management — Discover how automation can save you 5–10 hours per week.
• Solutions for Property Managers — Scale from 50 to 500+ units without scaling your costs.

Frequently Asked Questions

What is the best expense tracking software for landlords?

The best option depends on your portfolio size and what other tools you use. For landlords who want an all-in-one solution that combines expense tracking with tenant management, rent collection, and maintenance coordination, PropsManager is purpose-built for the job. For pure accounting, QuickBooks and FreshBooks are popular — but you'll need separate software for everything else, and the lack of integration creates extra work. Most landlords managing more than a handful of properties find that an integrated platform saves significant time.

How should I categorize rental property expenses for taxes?

Follow the IRS Schedule E categories: advertising, auto and travel, cleaning and maintenance, commissions, insurance, legal and professional fees, management fees, mortgage interest, other interest, repairs, supplies, taxes, and utilities. Your tracking software should map your expense categories directly to these line items so that tax preparation is straightforward. If you're unsure whether something is a repair (deductible now) or an improvement (depreciated over time), consult your CPA — getting this wrong can be costly.

Can I deduct mileage for driving to my rental properties?

Yes. The IRS allows landlords to deduct mileage for trips related to rental activity — visiting properties, meeting contractors, picking up supplies, attending landlord association meetings, and similar errands. For 2025, the standard rate is $0.70 per mile. You must keep a contemporaneous log of your trips, including date, destination, purpose, and miles driven. Expense tracking apps with built-in GPS mileage tracking make this effortless and provide the documentation you'd need in an audit.

How long should I keep rental expense records?

The IRS generally recommends keeping tax records for at least three years from the filing date, but for rental properties, the smarter move is keeping records for at least seven years. If you claim depreciation on a property — and you should — you'll need records for the entire period you own the asset plus three years after you sell it. Digital storage makes this easy and essentially free. There's no good reason to throw anything away.

Is expense tracking software worth it for landlords with only one or two properties?

Absolutely. Even with a single rental, you're dealing with dozens of expense categories, receipt management, mileage tracking, and tax reporting. At roughly $15–$50 per month for a solid platform, the software pays for itself the first time it catches a deduction you would've missed — which, for most landlords, happens in the first month. The time savings alone justify the cost: even one property generates enough financial activity to eat several hours per month if you're tracking manually.

Take Control of Your Rental Finances Today

If you've read this far, you already know the shoebox method isn't cutting it. Every dollar you don't track is a dollar you might be handing to the IRS unnecessarily or, worse, a blind spot in your property's financial health.

The switch to proper expense tracking software isn't dramatic. You can be up and running in an afternoon. Connect your bank accounts, set up your categories, install the receipt scanner on your phone, and start tracking. Within a month, you'll wonder why you waited so long.

PropsManager brings expense tracking, rent collection, lease management, and maintenance coordination into a single platform built specifically for landlords. No more juggling five different tools. No more manual reconciliation. No more missed deductions.

Ready to see how it works? Request a free demo and we'll walk you through the entire system. Your future self — the one not drowning in receipts every tax season — will thank you.