Allocate property fees or charges deducted to rental income

This article explains how to record rental income that has had property agent fees or charges deducted, if you have an unincorporated landlord FreeAgent account.

If you’re an unincorporated landlord and rent out a property which is managed by a property agent, you’ll need to follow the steps below to allocate the agent fees to the rental income.

1. Navigate to the bank transaction

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 and click on the relevant transaction to open up the explanation options.

Click on 'Adjustments' and choose 'Fees and commissions' from the drop-down menu.

2. Enter the amount of fees

Next, enter the amount of fees to be added in the 'Value' field. 

Select ‘Other’ from the ‘Category’ options and select ‘Property Management Fees’ from the drop-down menu.

You can also create a custom category if you wish. If you’re unsure which category to select, please ask your accountant.

Select the property that the fees relate to from the ‘Property’ drop-down menu and select ‘Save and finish’ at the bottom of the screen.

3. Explain the proportion that is Rental Income

Next, you will need to categorise the remaining balance of the bank transaction.

If you’re recording your rental income by explaining the bank transaction, select ‘Rental Income’ from the ‘Type’ drop-down menu. If you’ve created an invoice to record your rental income, select ‘Invoice Receipt’ from the ‘Type’ drop-down menu instead.

Select the property that the rental income relates to from the ‘Properties’ drop-down menu and select ‘Explain transaction' to complete the process.

The bank transaction will then be split between rental income and property fees.