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Managing Letting Agent Fees Deducted from Rental Income
Managing Letting Agent Fees Deducted from Rental Income

If you receive property income through a letting agent, this will help you account for their fee correctly.

Updated over a year ago

If you're a landlord using a letting agent to collect your rental income from your tenants, you will likely receive your payments from the agent after their fees have been deducted.

Here's how you can handle this in Coconut.

Example

Your tenant pays £1000 in rent to your letting agent. Your Letting agent takes a 10% management fee, and pays the remaining £900.

On your bank statement, you'll receive £900. For accounting purposes however, you need to record:

  1. Rental Income of £1000

  2. Letting Agent Fee Expense of £100

Here's how you would do this:

1. Categorise the £900 as Income

Mark the transaction as Income. If this is rental income, make sure you've set up your Income Stream as a property income stream correctly.

2. Add a manual adjustment for £100 to gross up the income to £1000.

Using the instructions to create a manual adjustment, add this as a 'Payment In' with the appropriate category and description.

3. Add another manual adjustment for £100 to record the expense.

Using the instructions to create a manual adjustment, add this as a 'Payment Out' with the appropriate category and description.

By doing these entries, you'll reach the final result you're looking for with the income of £1000 and expenses of £100.

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