Adding your Loans to your TurboTenant Accounting portfolio allows you to track the flow of funds through your business, as well as things like principal paydown and estimated equity. Before you can book a loan payment, you must first create a loan account.
Loan accounts in TurboTenant Accounting encompass both mortgage and non-mortgage loans. Creating a loan automatically adds it to your Chart of Accounts as a liability account. If it is an escrowed loan, the escrow account is also automatically added to the chart of accounts as an asset account.
The loan payment template helps you automatically break down regular loan payments into their components of principal, interest, and escrow (if applicable).
Loan accounts are not electronically linked in the same way as bank and credit card accounts, as loan payment transactions are typically already imported from the bank account side.
How to Create a Loan in TurboTenant Accounting
🚀 Pro Tip: Have your latest loan statement handy to complete each section accurately!
1) Navigate: Go to the Tracking tab and select the Loans page
2) Add Loan: Click the Add Loan button.
3) Enter Loan Details:
Loan Name & Type: Choose from Mortgage, Hard Money, HELOC, or Other.
Loan Scope: Assign the loan to the specific property it secures.
Monthly Payment Amount: Enter the total "out-of-pocket" amount that leaves your bank account.
Interest Rate: Enter the annual percentage rate (APR) accurately.
Monthly Escrow Transfer: Enter the specific portion of the payment allocated to escrow (taxes/insurance). Leave blank if you pay these manually.
Paid From Account: Select the linked bank account used for payments. If you use multiple accounts, leave this blank to manually categorize payments later.
4) Save and Continue
5) Enter an Opening Balance (optional but highly recommended)
An opening balance is not the original loan amount, but is the outstanding amount as of the start of your recordkeeping in TurboTenant Accounting.
As an example, if you're entering loan information in June when you start using TurboTenant Accounting, but your bookkeeping year started January 1, you'll want your loan balance as of December 31 the year prior, so we have the loan balance before your first payment logged in TurboTenant Accounting.
Managing & Editing Loans
View Transactions: Click View Loan to see every payment, interest charge, and principal reduction associated with that account.
Editing a Loan
Adjusting for Changes: If your escrow amount or total payment changes (common after an annual escrow analysis), click the Ellipses (...) then select the Edit Pencil to update the loan template.
Frequently Asked Questions (FAQs)
Q. Why doesn't my principal and interest breakdown match my bank statement exactly?
A. TurboTenant calculates interest based on the Current Balance and Interest Rate you provided. If your bank uses a specific day-count convention (like 30/360 or Actual/365) or if your payment was late, there might be a small discrepancy.
The Fix: You can manually adjust the breakdown on an individual transaction if the automated template is off by a few cents.
Q. What happens to the money sent to the Escrow account?
A. When you log a payment with an escrow portion, that money is moved from your Bank Account (Asset) to your Escrow Account (Asset). It is not an expense yet!
The Outcome: When the bank eventually pays your property taxes or insurance from that escrow fund, you must record that as an expense separately to reduce the Escrow Asset balance.
Q. I just refinanced. Should I edit my current loan or create a new one?
A. Create a new one. From an accounting perspective, a refinance closes one liability and opens another.
The Process: Mark the old loan as "Closed" (or zero out the balance) and create a new loan entry with the new terms and opening balance. This preserves your historical data for tax season.
Q. What is "Loan Scope"?
A. Loan Scope connects the debt to a specific property. This is vital for generating Property-Specific Profit & Loss statements. Without a scope, your interest expenses will appear as "General Business" costs rather than being tied to the performance of a specific rental unit.
Q. Why is the "Opening Balance" so important?
A. If you enter the Original Loan Amount (e.g., from 5 years ago) instead of the Current Balance, the system will over-calculate your interest expense. Interest is calculated as Balance X Rate; an incorrect balance leads to an incorrect tax deduction.