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Real Estate Professionals
Commission income arrives unevenly. The books should still make the year legible.
Three closings in one month and none in the next is normal in real estate. It is also the reason agents routinely misjudge what they have actually earned and what they owe.
Steingard Financial tracks commission income by transaction and keeps deductible business activity separated from personal spending, so the year is knowable before it ends.
What makes these books different
Income is lumpy and tax obligations are not
A strong quarter can create an estimated tax liability that is not obvious until the following spring.
Business and personal spending blur
Vehicle use, phone, meals, marketing and home office are all legitimate and all easy to record in a way that will not hold up.
Per-transaction profitability is invisible
Splits, referral fees, transaction coordination and marketing spend vary by deal, and the net on each one is rarely calculated.
What the service includes
- Commission income tracked by individual transaction
- Brokerage splits, referral fees and transaction coordination costs recorded against the deal
- Deductible business expenses categorized and substantiated
- Vehicle, marketing and home office cost tracking
- Estimated tax coordination with the agent’s tax preparer
- Monthly statements and a year-end package the preparer can work from
How the engagement works
Separate the activity
Business activity is separated from personal, and a structure is established for how transactions and their costs are recorded.
Track deal by deal
Each closing is recorded with its splits and associated costs, so net per transaction is a reported figure rather than an estimate.
Coordinate through the year
Income and obligations are visible as they accumulate, and are shared with the tax preparer before deadlines rather than after.
What is different here
Per-property, per-agent, and rarely per-company
Real estate covers several quite different businesses, but they share one trait: a company-level profit figure is close to useless. The unit that matters is the property, the agent or the deal.
The property is the unit
For holdings and rentals, income and cost belong to a specific property. Which one carries the portfolio and which quietly drains it is invisible in a combined total, and that is usually the decision the owner is trying to make.
Commission splits are the complexity
For brokerages, gross commission, agent splits, referral fees and deductions have to resolve per transaction. Recorded only as net, the books stop being able to answer what production actually was.
Cash timing is lumpy
Closings cluster, deposits sit in escrow, and expenses continue regardless. A month with no closings is not a bad month; it is a timing artefact, and books that cannot show the difference invite bad decisions.
Whether an amount is a repair or an improvement, and how depreciation applies, are questions for your tax professional. The bookkeeping records the detail those determinations require.
Where this fits best
- Individual agents operating as their own business
- Small teams with shared marketing and staff costs
- Brokers with agents whose splits must be tracked
- Property managers handling owner funds
- Investors holding rental property alongside agency income
What the books need to handle
The mechanics that matter in property and brokerage
The recurring work below is what separates real-estate bookkeeping from generic small-business bookkeeping.
- Income and cost coded per property. Set up once at the start, this is straightforward. Reconstructed later across several properties and a shared card, it rarely comes out clean.
- Capital improvements separated from repairs. They look alike on a statement and are treated very differently. Getting the detail right at entry keeps the option open at filing.
- Agent commissions and 1099 records kept current. Brokerages pay many contractors. Details collected at onboarding rather than in January — see sales tax and 1099 filing.
- Escrow and client funds kept distinct. Money held in connection with a transaction is not operating cash, and treating it as available is a common and consequential error.
- Loans split between principal and interest. A mortgage payment is not an expense. Recorded as one, both profit and the balance sheet are wrong.
For portfolios, the most useful single change is usually per-property reporting. Most owners are surprised by which property the combined figure was concealing.
Frequently asked questions
Can you track each property separately?
Yes, and it is the default rather than an add-on. Per-property income and cost is the only way the portfolio question gets an honest answer.
We are a brokerage with a lot of agents. Can you handle splits?
Commission splits, referral fees and deductions are recorded per transaction so gross production and net to the firm are both visible, and so contractor filing at year end is routine.
Do you work with property management software?
The recurring process works alongside it. The important part is that the management system and the general ledger reconcile to each other, which is where these setups tend to drift apart.
How are security deposits handled?
As a liability, not income — the money is held on behalf of a tenant. Keeping them distinct also keeps the operating cash figure honest.
Can you tell us the actual return on a property?
Where income, operating costs, capital spending and financing are coded per property, yes. That structure is best established at the start rather than derived afterwards.
The recurring problem
A good year is the one most likely to produce a bad April.
The pattern is consistent enough to predict. Commission income lands unevenly, spending rises with it, no estimated payments are made because the year is not over, and the obligation arrives as a surprise attached to the best year the agent has had.
Bookkeeping does not change what is owed. It changes when it is known — which is the entire difference between planning for a number and being presented with one.
Tracking at the transaction level does a second job: it shows which kinds of deals, price points and referral sources actually net the most after splits and costs. That is frequently at odds with which ones felt biggest.
Know the year before April explains it.
Tell Steingard Financial how the practice is structured, and the review will cover what the books would need to track.