Accounting for closing cost fees for a rental property purchase

JKaisJKais Member Posts: 3

I have been researching how to properly account for a rental property mortgage, and believe I'm close to understanding it all.

So far, I understand what to do for the following:
1. recording the property as an asset
2. accounting for the the purchase price, down payment & loan starting balance
3. accounting for the escrow held by the mortgage bank for insurance and taxes
4. how to separate/allocate my monthly mortgage payments into principal, interest and escrow.

I found the following two WAVE Community threads to be particularly helpful in getting all of this set up:

My question is how do I account for additional closing cost fees, taxes & a seller credit at purchase? The listed purchase price and downpayment alone do not reflect the total cost of purchasing the property. There were about $12,000 of additional closing costs that I want to account for to have an accurate financial picture for my rental business.

Here are a few examples of the additional closing costs/fees and credits for this property purchase:

1. County taxes: $939
2. Loan processing fees: $5,383

1. Aggregate Adjustment to bank: $339.10
2. Seller credit at purchase: $5,000

Thanks for any help you can send my way!


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