Vacation Rental Chart of Accounts: 2026 Setup Guide & Template

Your Chart of Accounts Wasn't Designed for Vacation Rentals (And It Shows)

Short-term rentals require a fundamentally different accounting approach than long-term properties—and understanding this distinction is the key to accurate financial management.

What makes short-term rentals different?

• You're holding owner funds in trust, not just collecting rent
• Revenue splits between cleaning fees, rental income, and management fees
• Expenses need property-level tracking for individual owner statements
• OTA commissions, dynamic pricing adjustments, and chargebacks

When your chart of accounts can't accommodate these realities, everything downstream breaks. Owner statements become manual projects. Profitability analysis lives in spreadsheets or doesn’t exist at all. Month-end close takes days instead of hours.

The solution? An STR-optimized chart of accounts creates the structure you need to organize transactions, generate owner statements, and track property-level profitability.

In this guide, you'll learn:

• Why traditional charts of accounts fail for vacation rentals (and the hidden fiduciary risks)
• The 6 essential components of an STR-optimized chart of accounts
• A free downloadable chart of accounts, QuickBooks-ready, template for immediate implementation

Why Standard Accounting Can't Handle Vacation Rentals

The core problem? Vacation rentals don't fit traditional business categories. You're running two businesses simultaneously—asset management and hospitality services—but your chart of accounts can only handle one.

Why is vacation rental accounting so much more complex?

Vacation rentals generate hundreds to thousands of transactions per property annually that need to be delivered across multiple dimensions, multiple general ledgers, and multiple different stakeholder (property owner, property manager, etc)

Revenue becomes dynamic instead of static. Nightly rates change based on season, day of week, and demand. Multiple fee types flow through your accounts: cleaning, pet, parking, early check-in, late checkout, damage, and cancellation fees. OTA commissions get deducted before payout, so you never see the gross amount in your bank account. Operating expenses like cleaning happen after every checkout, not annually.

The Revenue Recognition Trap

Every property manager faces the same invisible trap: your PMS records bookings as revenue immediately, but accounting standards say you haven't earned it until the guest checks in.

The Pattern:

January: A guest books your property for a July stay through Airbnb for $3,500 total.

Your property management software records $3,500 in revenue immediately. The owner sees it on their January statement and starts planning how to spend their share.

But when did you actually earn this money? The guest hasn't stayed yet. Airbnb hasn't paid you yet. The service hasn't been delivered.

Three immediate problems:

1. Artificial profitability: January looks great because you're counting July's work as this month's earnings. Scale this across 150 properties, and your monthly P&L becomes meaningless.
2. Wrong owner statements: The owner thinks they earned money in January that they won't actually earn until July. This sets up every future conversation to start from a false baseline.
3. Lost tracking: You can't track what you actually owe because unearned revenue (deposits for future stays) is mixed with earned revenue (completed stays).

The Cancellation Cascade

June arrives. The guest cancels under Airbnb's flexible policy. The $3,500 goes back to them.

But that money has been living in your accounting—and in the owner's expectations—for five months. You've already:

• Paid yourself management fees based on that booking
• Shown the owner $3,500 in their year-to-date earnings
• Possibly paid the owner a distribution that included this booking

The real cost of this single cancellation:

• 2-3 hours untangling the accounting: $150-$200 in labor
• 1 hour explaining to a confused owner: $100-200
• Owner relationship damage: potentially portfolio-threatening

Multiply this across 150+ bookings per property, per year. At a 10% cancellation rate, you're dealing with 5-15 of these nightmares per property annually.

The Fiduciary Risk Nobody Talks About

Property management companies operate with other people's money. Without proper separation in your chart of accounts, you're likely non-compliant with fiduciary standards whether you realize it or not.

Problems show up during:

• Owner disputes: "You said I earned $45,000 but I only received $38,000."
• Audits: Auditors examine your chart of accounts first, looking for separation between trust funds and operating funds
• Portfolio acquisitions: Buyers doing due diligence will walk away from companies that can't clearly demonstrate proper fund handling

Property management companies lose multi-million dollar portfolios over accounting disputes. Not because money was stolen, but because the books couldn't prove it wasn't.

Your Chart of Accounts: The Foundation Everything Builds On

Your Chart of Accounts (COA) is the structural foundation of how every dollar is classified, reported, and explained. During an audit or owner dispute, the COA determines:

• Whether transactions are clearly and consistently categorized
• How quickly you can trace a charge from bank → transaction → property → owner
• Whether trust activity vs operating activity is visibly separated
• If your financials tell a defensible story without manual explanations

Auditors, owners, and buyers don't trust your narrative first—they examine structure. A clean COA makes issues obvious and explainable. A messy one forces you to justify intent after the fact, when you're already on defense.

The Multi-Dimensional Tracking Requirement

Traditional accounting often forces you to choose one dimension: track by property OR owner OR entity. Vacation rental reality demands all three simultaneously.

You need to answer: "What did Property A spend on cleaning in Q3?" That requires tracking by property, category, and time—all at once.

The QuickBooks Workaround (And Its Breaking Point)

Property managers attempt solutions using classes for properties, locations for markets, tags for owners, and sub-accounts for detail. The problem? This requires manually tagging every transaction, human error is inevitable, and new team members make mistakes that corrupt historical data.

6 Essential Components of an STR Chart of Accounts

A standard small business chart of accounts typically has 30-100 accounts depending on complexity. A properly structured vacation rental chart of accounts might need 120-180 accounts with six specialized components.

This isn't complexity for complexity's sake. Each component solves one of the specific problems we identified. However, be mindful that excessive account granularity can lead to analysis paralysis and higher bookkeeping costs for smaller operators. Start with the core structure and add detail as your operation scales.

Note: The account numbers referenced throughout this article (e.g., Account 1020, Account 2200, etc.) are examples used to illustrate these accounting concepts. The specific account numbers in your chart of accounts may vary.

1) Trust Accounts: Separating Your Money from Everyone Else's

Who needs this: Property managers handling funds on behalf of guests and owners. If you only manage your own properties, skip to the next section.

In most businesses, when money hits your bank account, it's yours. In vacation rental management, money flows through your accounts in three distinct categories:

• Guest money: They've paid for a future stay that hasn't happened yet
• Owner money: You've collected rent on behalf of the owner but haven't distributed it
• Security deposits: Refundable money that never belonged to either party

Mixing these funds with your operating capital creates legal exposure.

The Three-Account Structure:

Account 1020 - Guest Trust Account holds prepayments for future reservations. Money moves out when the guest checks in and the stay is "earned."

Account 1030 - Owner Trust Account holds rental income collected on behalf of property owners before monthly distribution.

Account 1040 - Security Deposit Trust Account holds refundable deposits. These carry significant legal risk because you must return them within statutory timeframes (often 14-30 days) unless you have documented damages. However, commingling trust funds—using owner money to pay business expenses—is generally considered a more severe legal violation in property management law than delayed security deposit refunds, which typically result in civil small-claims disputes.

Important regulatory note: While three-way trust reconciliation (reconciling trust accounts monthly against both bank statements and liability ledgers) is considered a financial best practice and is often legally required for licensed Real Estate Brokers, STR managers may operate under different regulations depending on your state. Some jurisdictions have minimal or no specific STR management regulations. Regardless of legal requirements, implementing proper trust accounting protects both you and your clients.

Critical checkpoint: "If an owner called right now demanding their balance, could I tell them the exact amount held in trust and immediately transfer it?" If the answer is no, your trust accounting needs restructuring immediately.

2) Clearing Accounts for OTA & Payout Reconciliation

The Reconciliation Nightmare

When reconciling a single month, you often encounter three conflicting totals:

• Your PMS shows $10,000 in bookings
• Your bank statement shows $9,150 in deposits
• Your Airbnb dashboard shows $9,850 in payouts

All three are "correct," but they represent different stages of the cash flow cycle. Clearing Accounts (Current Assets) act as temporary "holding pens" to track money as it moves from a guest's credit card to your bank account.

The Four Essential Clearing Accounts:

Account 1200 - PMS/Reservations Clearing bridges the gap between earned revenue (stay date) and payment processing.

Account 1210 - OTA Payout Clearing tracks "Gross vs. Net." Airbnb collects $2,000 but pays $1,820. This account holds the $2,000 until the $180 platform fee is recorded as an expense, bringing the balance to $0.

Account 1220 - Merchant Card Processing Clearing handles settlement timing. It tracks funds processed by Stripe or bank transfers that have been "sent" but haven't "landed" in your bank yet.

Account 1230 - Suspense/Unapplied a temporary "catch-all" for mystery deposits. Rule: This must be investigated and emptied to $0 before closing the month.

The Zero-Balance Principle

After full reconciliation, all clearing accounts should net to zero. If Account 1210 still shows a $400 balance after you've processed all OTA commissions, you have a discrepancy to investigate.

Practical reality: In high-volume businesses, clearing accounts like Account 1220 rarely show $0 on any given day because there's always money "in flight." The goal is net zero at the moment of reconciliation (typically month-end), not a constant zero balance. Think of it as a snapshot in time rather than a continuous state.

Time investment note: While clearing accounts significantly improve accuracy and make discrepancies visible and traceable, they do require more journal entries than a simplified system. The real time savings typically materialize during year-end tax preparation and audit scenarios, not necessarily in daily bookkeeping. Property managers report that the initial setup requires more work, but the downstream benefits in accuracy and reduced reconciliation confusion are substantial.

3) Owner Liability Accounts: The Foundation of Owner Statements

Who needs this: Property managers handling funds for property owners.

Your owner statement should be a direct report generated from your accounting system—not a separate Excel spreadsheet you manually maintain.

The Four Core Owner Liability Accounts:

Account 2200 - Owner Revenue Payable represents the gross rental income collected on behalf of the owner before your management fees are deducted.

Account 2210 - Owner Reserve Payable tracks reserves withheld for future needs. Note: Rather than withholding a percentage of gross bookings (which can result in prohibitively high reserves—imagine $15,000 annually on a $100,000/year property), most property managers use a "cap" approach: "We maintain a $1,000-$2,000 reserve balance at all times" or "We hold one month's average revenue in reserve." This is more palatable to owners while still providing an emergency buffer.

Account 2220 - Due to Owners shows the net amount currently owed. After you've deducted your management fee, operating expenses, and reserve contributions, this is the check you'll write to the owner.

Example calculation:

• Owner Revenue Payable: $5,000
• Less: Management fee (20%): -$1,000
• Less: Operating expenses: -$450
• Less: Reserve contribution: -$500
• Equals: Due to Owner: $3,050

Account 2270 - Owner Statement Adjustments creates a clean audit trail for corrections.

The Automated Owner Statement

When structured correctly, your owner statement becomes a simple account register report—no Excel formulas, no manual data entry.

4) Revenue Account Structure: Beyond "Rental Income"

Many vacation rental operators have one revenue account: "Rental Income - $1,200,000." This tells you how much money flowed through, but reveals nothing about profitability.

Company Revenue vs. Owner Revenue

For Property Managers: You must distinguish between revenue you earn and revenue you collect on behalf of owners.

Company Revenue (what you keep):

• 4000 - Management Fee Revenue: Your primary income, typically 15-25% of gross bookings
• 4010 - Cleaning Fee Revenue - Company Portion: If you mark up cleaning services. Critical compliance note: Your Management Agreement must explicitly authorize maintenance/cleaning markups. In many jurisdictions, keeping the spread without contractual authorization constitutes a breach of fiduciary duty.
• 4030 - Guest Service Fees: Pet fees, parking fees you retain
• 4095 - Refunds & Discounts (contra-revenue): Tracks your refund rate

Owner Revenue (what you collect for others) does NOT flow through your income statement. Instead:

• Debit: Bank Account $5,000
• Credit: Account 2200 (Owner Revenue Payable) $5,000

This ensures your profit and loss statement reflects your business performance, not pass-through funds.

For Self-Managers: You own the properties, so all rental revenue is yours:

• 4000 - Nightly Rate Revenue
• 4010 - Cleaning Fee Revenue
• 4020 - Pet Fee Revenue
• 4030 - Other Guest Fees
• 4095 - Refunds & Discounts (contra-revenue)

Analysis This Structure Enables:

With proper revenue segmentation, you can answer:

• "Management fee revenue was $180K from $1.2M in gross bookings—we're at a 15% take rate"
• "Pet fee program generated $12K but cost $8K in extra cleaning = $4K net contribution"
• "Refund rate jumped from 3% to 7%—investigate guest satisfaction issues"

5) Cost of Goods Sold vs. Operating Expenses

The Critical Distinction:

COGS scales directly with booking volume. Zero bookings = zero COGS. OpEx is fixed business overhead you pay regardless of bookings.

This separation reveals:

• Gross Margin (Revenue - COGS) = Is your pricing model viable?
• Operating Margin (Gross Profit - OpEx) = Are you running efficiently?

COGS Accounts (5000-5099) - Scale with every booking:

• Cleaning and turnover labor
• Linen and laundry service
• Guest supplies (toiletries, coffee, toilet paper)
• OTA commissions (Airbnb/Vrbo take 3-15% per booking)
• Payment processing fees (2.9% + $0.30 per transaction)

Operating Expense Accounts (6000-6999) - Fixed costs:

• 6000 - Payroll & Benefits
• 6100 - Software & Technology
• 6200 - Marketing & Sales
• 6300 - Professional Services
• 6400 - Office & Administrative
• 6500 - Insurance

The Diagnostic Power:

Example Profit & Loss:

• Revenue: $1,200,000
• Less COGS: -$360,000 (30%)
• = Gross Profit: $840,000 (70% gross margin)
• Less Operating Expenses: -$480,000 (40%)
• = Operating Profit: $240,000 (20% operating margin)

Interpretation:

• 70% gross margin = Pricing model is healthy (typical range: 65-75%)
• 40% OpEx ratio = Operations may be bloated (target range: 25-35%)
• Action: Focus on reducing operating expenses, not renegotiating cleaning contracts

Important context on benchmarks: These percentages are targets, not universal truths. Your business model significantly impacts these ratios. A "Rent-to-Rent" (Arbitrage) model where you lease properties and sublease them as STRs will have a much higher OpEx ratio (potentially 50-60%) due to master lease payments. A traditional property management model typically achieves lower OpEx ratios. Use these benchmarks as directional guides, not absolute standards.

6) Capital Expenditures: The Long-Term Asset View

Property managers should track CapEx as cash expenditures in owner statements. If your PM company also owns properties, you'll track depreciation for YOUR properties only, not for client properties. The distinction matters for:

• Tax treatment: CapEx creates depreciation deductions spread over multiple years
• Owner expectations: CapEx requires separate funding (not from monthly operating income)
• Property value: CapEx improvements increase property value and owner equity

CapEx Account Structure

Fixed Assets (1500-1599):

• 1500 - Furniture & Fixtures
• 1510 - Appliances
• 1520 - HVAC Systems
• 1530 - Hot Tubs & Specialty Equipment
• 1540 - Property Improvements

Accumulated Depreciation (1600-1699): Tracks cumulative depreciation for each asset category.

The Owner Communication Advantage

Poor approach: Show an $8,000 HVAC replacement as a single-month "expense." The owner panics at the massive negative month.

Professional approach:

1. Notify owner of CapEx need
2. Fund via capital call or reserve drawdown (separate from operating income)
3. Record as a Fixed Asset with proper depreciation schedule
4. Owner statement shows the capital expenditure as a separate line item: "Capital Investment: HVAC System - $8,000"

Important clarification on depreciation reporting: Property managers often provide cash-basis owner statements, not accrual-basis financial statements. You would NOT show "$44/month depreciation" on monthly owner statements for several reasons:

1. Depreciation is non-cash: It's a tax accounting entry that doesn't represent actual money movement
2. Asset basis tracking: The property manager doesn't track the owner's cost basis, purchase date, or depreciation schedule—that's the owner's CPA's responsibility at year-end
3. Owner confusion: Showing depreciation monthly would confuse owners who expect to see actual cash in and cash out

Instead, the owner statement shows:

• The initial capital expenditure when made: "CapEx Investment: $8,000"
• How it was funded: "Paid from Reserve Account" or "Owner Capital Call"
• The owner's tax preparer handles depreciation schedules during annual tax preparation

This approach keeps owner statements focused on cash flow while properly categorizing long-term asset investments separate from operating expenses.

Putting It All Together

A properly structured vacation rental chart of accounts isn't just more detailed than a standard small business COA—it's fundamentally different.

The six components enable:

1. Trust accounting that maintains fiduciary compliance
2. Clearing accounts that make timing differences visible and reconcilable
3. Owner liability tracking that generates automated owner statements
4. Revenue separation that distinguishes company income from pass-through funds
5. COGS/OpEx distinction that reveals where profitability problems actually live
6. CapEx tracking that properly handles long-term asset investments

Whether you're managing 20 properties or 1000+, these structural foundations scale to support growth while maintaining clarity and compliance. Start with the core structure appropriate to your operation size, and add complexity only when the additional granularity provides genuine business value.

Download the Free Vacation Rental Chart of Accounts Template

The structure we've outlined represents hundreds of hours of refinement across dozens of property management companies. You don't need to recreate that from scratch.

This template gives you the complete account structure, pre-formatted for QuickBooks Online, ready to customize for your specific business.

What's Included in the Template

Complete Account Structure (80+ Accounts)

• Bank accounts (operating + 3 separate trust accounts)
• Clearing accounts (PMS, OTA, card transactions, suspense)
• Owner liability accounts (revenue payable, reserves, distributions, adjustments)
• Revenue accounts (company revenue separated from owner revenue)
• COGS vs. Operating Expense distinction
• CapEx/fixed asset accounts

QuickBooks Online-Ready Formatting

• Account Type and Detail Type columns pre-filled
• Standard account numbering with room to expand
• Can be imported directly or used as a reference guide

Your next step: Download the chart of accounts template below. Set aside 90 minutes this week to map your current accounts to the template structure. The best time to upgrade your COA is now. [Download the Chart of Accounts Template]