and now we will continue our studies of flipping properties by learning about how to record
renovations or upgrades if you have any questions about this topic you can leave them in the comment
section below and I'll do my best to help you and of course if you feel the video helped you I hope
you will click like and don't forget to subscribe to get updates on new videos that come out all the
time how do you record property renovation also called upgrades at the moment that you pay for
them well all the money you pay for upgrades regardless of the specifics should be recorded
into one fixed asset type of account you should not use the sub accounts to track the separate
type of expense upgrades the total amount in this account reflects the total value that you
have added to the home this may not directly be related to the amount of market value or selling
value but you're still adding value for the amount that you pay let's add a fixed asset account let's
call it living Livingston Street upgrades or renovations we will use this account for any
type of upgrade that we pay for and we'll put it in the chart of accounts as a fixed asset from
the main menu click list chart of accounts then in the bottom left click account new this is a
fixed asset we click continue and we type in the name renovations once ten Livingston Street now
all we have to do is click Save and close and now we have the account on our list to be able to use
and record anything we pay for upgrades and now let's continue with our example let's imagine on
tober 10 we paid a new vendor handyman Negri to add a room to the house and we paid him $5,000 so
from the main menu or from the icon bar we opened the check window and we see that that was October
10 2020 so we fast forward to 10 10 20 20 and we don't have handyman Negri on the list so we click
add new and he's a vendor and we type in handy men see if anybody remembers the old mr. Rogers
show or Captain Kangaroo but we paid this person for this organization $5,000 and what did we
pay this person for we paid them for upgrades and renovations for the 110 Livingston Street I think
it was this one renovations 110 Livingston Street there we go and we click Save & close and if we
open the trial balance you can see for the first time renovations 110 Livingston Street shows up
for $5,000 now let's imagine on October 22 we had to pay con Edison for a special private rewiring
job of the houses electrical system and we paid $4,000 well that still counts as renovations and
upgrades so that should be very simple we open the check window and we switch to October 22nd
the day we wrote the check we paid con Edison the vendor and we paid $4,000 and you could describe
the reason in any way you want but the bottom line is this is renovations to 110 Livingston
Street so now when we click Save and close we can open up the trial valve balance and we can
see that the renovations for 110 Livingston Street is up to $9,000 and finally on October
28th we paid Rex repair shop to redo the roof for six thousand it doesn't matter what he does
it still counts as renovations so we would do it the same way we open the check window and we put
October 28 and we choose Rex repair the vendor and the amount we're paying I believe was six
thousand yes now you might want to put roofing or something in the memo but that would be the most
detail you could put because this time we don't want repair expense this time we want renovations
110 Livingston Street now when we click Save and close we can open the trial balance and we can see
that the building renovations are already up to one-for-one Ted Livingston Street fifteen thousand
dollars and don't worry that our cash is negative it's going to become positive very very soon you