How to record rental income for a property
This article explains how to record rental income for a property that you’ve added to an unincorporated landlord account in FreeAgent.
Please note that the unincorporated landlord account type is currently only available if you work with an accountant who is a FreeAgent Partner. You’ll need level 7 access or above to your FreeAgent account to follow the steps below.
If you have an unincorporated landlord account type and rent out a property, you can record the rental income by either explaining a bank transaction as ‘Rental Income’ or creating an invoice. Please note that doing both will result in your income being double-counted.
If you have refunded rental income to one of your tenants, find out how to record a rental refund.
Explaining a bank transaction
If you’re explaining a bank transaction to record rental income instead of creating an invoice, navigate to the 'Banking' tab at the top of the screen and select 'Bank Accounts' from the drop-down menu.
Choose the relevant bank account from the list.
Select the transaction that relates to the rental income.
Select ‘Rental Income’ from the ‘Type’ drop-down menu.
Select the property that the rental income relates to from the ‘Properties’ drop-down menu.
Select ‘Explain Transaction’ to complete the process.
If you have more than one transaction that you need to explain as rental income for the same property, tick the checkboxes to the left of the relevant transactions and select ‘Rental Income’ from the ‘Type’ drop-down menu in the panel on the right-hand side.
Next, select the relevant property from the ‘Properties’ drop-down menu and select ‘Explain [X] transactions’ to explain all the selected transactions in the same way. Remember to include an appropriate description for the selected transactions. If you leave the ‘description’ field blank, the transactions will automatically be given the original descriptions from the bank feed import or bank statement upload.
A record of the bank transaction(s) being explained will appear in your Audit Trail report.
Creating an invoice
If you’re creating an invoice to record rental income instead of explaining a bank transaction, you’ll need to add the tenant as a contact in FreeAgent before creating the invoice.
Add the tenant as a contact
To do this, navigate to the ‘Contacts’ tab at the top of the screen.
Select ‘Add New Contact’ in the top-right and follow the steps for adding a new contact in FreeAgent.
Create the invoice
Next, navigate to the relevant property and select 'Invoice' from the 'Add new' drop-down menu.
Alternatively, navigate to the ‘Work’ tab at the top of the screen, select ‘Invoicing’ from the drop-down menu and select 'Add New Invoice'.
Select which tenant the invoice is for using the ‘Contact’ drop-down menu, and select which property the rental income relates to from the ‘Property’ drop-down menu.
If you haven’t added a property yet, you can enter the property details in the ‘Add a Property’ section.
Once you’ve completed the relevant details for the invoice, select ‘Create New Invoice’ to complete the process. Find out more about how to create an invoice.
A record of the invoice being created will appear in your Audit Trail report.
Find out how to view a breakdown of the rental income allocated to a property and its overall profitability.