In this series, we are covering the basics of property management accounting. Part 1 discussed some of the more common accounting terms you will encounter throughout this series. In this part 2, we will cover books and accounts, both for your property management company and your clients.
Part 1: The Basics
In this series, we are going to cover the basics of property management accounting. Property management accounting is different from standard accounting because you not only need to keep track of your property management company’s finances, you are also managing separate accounts for the properties you manage.
Raising the rent is a necessity at times and just a smart business practice at others. With the average annual inflation rate in the United States at approximately 3.22% per year, a rent increase is necessary periodically to keep a property profitable.
While property managers understand that rent increases are necessary over time, many tenants do not, so the process should always be handled delicately. After all, at times a lost tenant resulting in a turn and potential vacancy is more expensive than the lost revenue from skipping the rent increase in certain circumstances.
Skilled property managers wear many hats. Learning how to respond to negative online reviews is the public relations hat. It just as crucial as the “lead generator” hat because so many people trust online reviews when searching for a new business partner. In fact, according to Inc.com, 91% of people read online reviews, and 84% of those people trust the review as if it was coming from a friend.
Property management is a specialized field that requires above average intrapersonal skills, patience, and organization. Choosing to run a property management business means hard work and perseverance, but it is also very advantageous. With all of the heart you put into your property management business, you should be sure you are not leaving money on the table. Here are six things you should review in your internal operations to tighten up your earnings.
Reviewing the Options of Outsourcing Vs. Insourcing
The virtual assistant market is thriving. Companies like Upwork allow talented individuals to connect with companies that need help while providing payment guarantees and community-based references for the employer.
Whether you’re just starting out or you’ve been managing properties for a while, you’ll eventually come to a point where you’ll need to know how to grow your property management business.
Best in Class Versus Integrated Solutions
At some point, it will become mandatory for property managers to utilize a mix of technology to run their business successfully. The good news is, using technology helps make tasks easier to manage while simultaneously preventing moving parts from becoming uncontrollable.