Transfer Funds Between Properties
At times you might find it necessary to move the cash flow from one property to pay for an expense on another property in the portfolio. Instead of asking an owner to mail a check to cover a negative property balance, these instructions are designed to allow the system to offset that negative balance by transferring funds from a property ledger within their portfolio with a positive balance.
Owner Contributions | Multiple Properties
You have a choice between two methods. The first (option 1) automates the process when using the Owner Payment Wizard for owner distributions. The second (option 2) is to manually post the movement of funds. A default Owner Contribution category should be created for either process.
Choose the Default Owner Contribution Category
Before processing the first transfer, be sure to create and choose a default owner contribution category for this type of transaction.
In your Rentec Direct account:
- Verify you have an owner contribution category created.
Instructions for creating new categories can be found here: Setting Up Categories (Chart of Accounts)
- Then proceed to Settings
- Click Accounting Defaults
- Choose the Default Owner Contribution category from the drop-down menu
- Click Save when finished
From there, choose one of the options below.
Option 1: Post an Owner Contribution During a Disbursement
- Click Accounts
- Click the Pay All Owners option
- Click the checkbox to choose the owner
- Click the blue arrow to display all properties for that owner
- In the Amount Due column, enter a negative dollar amount on the property line with the negative balance
Note: The amount you enter will be deducted from the positive amount available and transfers that amount (posts a transaction) to the property with the negative balance
- Proceed with any other owner disbursement changes
- If you are new to owner contributions, more information is available here: Owner Contributions
- Additionally, information on owner disbursements can be found here: Pay Owner Disbursements
- Click the Submit Payments button when ready to process
Tip: For a real-world example, check out this Rentec Direct blog article here: Simplified Owner Contributions for Owners with Multiple Properties
Option 2: Manually Post Transactions to Show Movement of Funds Between Properties
To manually post transactions, take the two-step approach with the instructions below.
Step One -- Transfer Funds Out of a Property Ledger
To reflect the transferring of funds from one property ledger to another, you first need to transfer funds out of a property ledger that has a positive cash flow.
- Click Properties
- Right-click on the Property that has the positive cash flow you wish to transfer and choose Post Expense from the menu
- Post an expense transaction for the amount you wish to transfer, using the Owner Disbursement category
- If you will be moving actual funds from one bank account to another, select the appropriate account the funds are to be pulled from in the Bank drop-down menu. Otherwise, leave the bank as NONE if no physical funds will be moved out of an actual bank account
- In the Memo portion of the transaction, you can indicate which property is receiving the transfer
- Click Post Expense when finished
Step Two -- Post Funds to a Property Ledger
Now that those funds have been removed from the positive cash flow property ledger, you will want to post that amount to the property ledger needing the funds to cover expenses.
In your Rentec Direct account:
- Click Properties.
- Right-click on the Property that has the negative cash flow and choose Post Income from the menu.
- Post an income transaction for the amount you removed from the first property using an Owner Contribution category.
Note: you may need to add an Owner Contribution income category before processing this task.
Instructions on how to add an Owner category can be found here: Owner Contributions
- If you will be moving actual funds from one bank account to another, select the appropriate account where you are depositing physical fund into using the Bank drop-down menu. Otherwise, leave the bank as NONE if no physical funds will be moved into an actual bank account.
- In the Memo portion of the transaction, you can indicate the property you pulled funds from in Step One.
- Click Post Income when finished.