Determining Qualifying Criteria
Before detailing how to determine which criteria you will use for your applications, first be aware that you are legally required to inform your applicants of what they are. Making this information part of your application ensures that the applicant both has the opportunity to review the criteria and signs the document attesting as much. There are legal ramifications if this signature is not captured, as the presumption is by default that the information was not provided for review.
Details about the following criteria should be provided:
Specify which kinds of convictions and adjudications will disqualify an applicant. Establishing a clear timeframe will also better inform an applicant with a criminal background as to whether or not you will consider prior convictions from three, five, or twenty years or more in the past. Check out our previous post that discusses the criminal background check! Understand that requiring an entirely spotless criminal record is considered a violation of the Federal Fair Housing Act. Otherwise, having a substantive reason for disqualifying based on certain other convictions and adjudications (namely violence, sexual offenses, and drug manufacturing and distribution) is reasonable.
Previous Rental History
You won’t be relying solely on the information provided to you by the applicant. Using a third party (or several) to verify rental history will help you to establish the kind of renters the applicants are. By having the applicant sign a release form, you will be able to inquire as to whether their rent was paid on time, whether or not any lease violations were documented, if there were any pets with the applicant, and what condition the property was left in. You are entrusting your property to your future tenant, and you want to know that it is in good hands!
The standard household income requirement is a gross total of three times the monthly rent. This comes from section 8 of the Housing Act of 1937 which in 1981 was amended to state that a tenant must pay at least 30% of their monthly income towards housing. Between the rising cost of living and wage stagnancy, some renters in large cities are spending up to two-thirds of their income on housing. According to the 2020 Joint Center for Housing Studies of Harvard University, one in four renters pays more than 50% of their income on rent. If this trend continues, you could expect (due to supply / demand) that income requirements will be reduced to asking that the total monthly household income is only twice the amount of rent. However, three times the monthly rent currently prevails as the industry standard and a change to that threshold is not on the horizon.
Many landlords have a flat credit score threshold for their applicants, while others prefer a context-based approach. Credit scores as we know them today began in 1989. As a landlord, you will most likely use credit reporting to screen your applicant for unpaid debts and other financial burdens that exist outside of their monthly income. While you may decide not to rely on the score itself, you will need to review the report for information that will be pertinent to you as a property owner such as unpaid utility bills, evictions filed against your applicant, and bankruptcies. The leading cause of bankruptcies in America is medical debt, with two-thirds of all bankruptcies filed due to the high cost of healthcare. Being informed of where exactly your applicants stand financially will help you make the best decision in your process.
Failure to provide accurate or complete information on the application form.
As previously discussed, online applications open the door to increased fraudulent activity. If at any point in the process you determine that documents, contacts, or any other information is fraudulent, you can deny based on this alone. If you can’t count on an application being accurate, then you can’t use it to qualify a tenant!
Keep in mind (as always!) that these qualifying criteria standards must fall within the guidelines of the Fair Housing Act. Meaning also that they must be applied to every applicant, every time, no matter what! Standardization not only makes for effective processing, it also protects you in the event that an applicant assumes that they have been unfairly disqualified for your property.
Adding another buffer between you and the applicants is also recommended! You can do this by hiring a qualified and experienced Property Manager who will screen applicants on your behalf. Frontline Property Management has a team of Property Managers as well as a department dedicated to processing applications. Our Tenant Coordinators work every day to handle incoming applications and find you the best tenant for your property!
Contact us today to learn more about how Frontline Property Management manages thousands of doors in Dallas / Fort Worth and surrounding area, and how you can turn your property into truly passive income!
Do you have a property that you need help with? Just fill out this form and we will reach out to you!
Speed vs Accuracy: Efficiently Finding Quality Tenants
The Dallas-Fort Worth rental market is one of many (and one of the most) competitive rental markets in the nation. Due to the upward-trending boom in Millennial and Gen Z populations, as well as the unexpected conditions of the pandemic and the Texas freeze – there is a crunch for renters applying to properties. You may have felt the crush of applications and with it, the anxiety of meeting such an increased demand. While it is better to have more options rather than fewer when it comes to applicants, as paperwork piles up you may find yourself rushing to approve someone for the sake of having it done.
Not so fast.
You want to find a tenant who meets the standards you hold for the property. While you are not holding out for the best possible tenant in existence, you do want a tenant who absolutely qualifies. With the increase in document fraud and online scams, reviewing your potential tenants with a fine-tooth comb is necessary. But how are you able to do so when you have multiple applications on one property? When you are processing them all yourself while also receiving calls and emails and texts from agents, interested parties and applicants following up on their applications? Here are tips on how to be efficient, effective and most importantly, accurate in reviewing your applications:
Use an Application Portal
In a competitive market, applicants have zero time to waste. As properties are being snapped up, they need to be able to apply as quickly as possible. That means not having to trek to your office to pick up an application.
An application portal guides applicants through the process intuitively. Portals that require a registration will help you better track your applications to easily parse the completed apps from those in progress.
State Qualifying Criteria Up Front
It is your legal obligation to require that every applicant review the qualifications for the property that you manage. This includes the income requirement, your policy on the credit history and criminal background check, pet policies (including breed restrictions) – absolutely everything that needs to be considered before submitting an application. Eliminating the most obviously disqualified applicants before they apply is sure to lighten your workload and save both you and the applicant some disappointment.
Charge an Application Fee
If you want everyone to participate in a program, you make it free. When you want to restrict participation to interested parties who can pay, you charge an admission fee. It’s also true of applications. Processing applications costs time, and running screenings for applications costs money, which justifies charging an application fee.
You may, however, consider a reasonable compromise for your applicants: If you don’t process their application, don’t process their payment. If you have spent no time on an application and did not run a screening, then the applicant paid only for the privilege of being on a waiting list. This can leave a bad impression with applicants who would otherwise try to rent with you at a later time, or if your accepted tenant falls through. Renting housing is a business, which means that customer service is something to consider. You are not legally required to refund application fees at all in Texas, as application fees are considered nonrefundable so long as the law is followed.
Process Applications on a First-Come, First Served Basis
Utilizing an application portal makes it easier to pin down when exactly an application is submitted. Prioritizing applications on a first-come, first served basis is the easiest way to stay compliant with the Fair Housing laws, eliminating the opportunity for any bias to come into play when reviewing multiple applications. You simply take whoever is first, and work that application.
There is a big however – just because an application is submitted first does not mean that the application will remain in first place. When reviewing multiple applications, if your first application is missing documents or information, move on to the next completed application in line while they get back to you. An application can fall from first place to second in line, and so on and so forth as more applications provide everything that is required. Keep the lines of communication open so that your applicant can have the opportunity to provide the materials, but by no means should you lose out on the next potential applicant waiting on the first. Remember, these applicants are moving very quickly in this market, so while you may have multiple applications, don’t mistake any as a guarantee. Many applicants are inquiring into several different properties at once. There is simply no time to waste. Communicate quickly about missing information and move on.
Once you have the broad strokes of receiving applications down, you’ll find it easier to work through your application list in an orderly, systematic manner. Creating a Standard Operating Procedure in this way will help you be consistent and organized in the face of waves of applications. Knowing when to move on, who is immediately disqualified, and where to narrow your focus will help you find the right tenant in the right time.
If this sounds like a job in and of itself – you’re right! Frontline Property Management has a department that is dedicated to processing applications for our clients! Our Tenant Coordinators work daily to communicate with potential tenants, review documentation, run screening reports and comb through the details so that our Property Managers have all the facts when reviewing the results.
Contact us today if you’d like to leave the application process to the professionals and start enjoying your investment as a truly passive income!
Have a property that you need help with? Just fill out this form and we will reach out to you!
Sustainable Property Management: What Green Features are Millennials and Gen Z Expecting?
With an increased focus on climate and weather-related realities that we face, younger generations (who are quickly becoming the largest portion of the rental population – Millennials are already the largest group of homebuyers) are more likely to actively seek out businesses and properties that feature Green amenities. As a property owner with your eye on the market and a finger on the pulse, you’ll be exploring which features are right for your property and for your current and future renters!
Meeting the demands of Millennials and Gen Z renters will not only secure a stronger rent now, but will leave you well-positioned to increase attraction and retention down the line. Here are a few features that these renters are looking for:
Making recycling convenient is not only something that tenants are looking for in a new complex; policy has now begun to reflect this growing concern. As of Jan 1, 2020, Dallas has had an ordinance in place which requires apartments & multi-family dwellings of more than 8 units to provide recycling facilities on-site. Fort Worth has had such a policy in place since 2014.
Smart Home Features
Between 89-95% of Millenials and Gen Z renters own smartphones. Implementing this basic tech in your property management is a direct avenue to reach these renters. There has been an increase in gadgets like keyless locks, doorbell cameras and smartphone-controlled led security lights, but also in higher-tech features such as “virtual doorman” services and extended smart home devices such as Amazon’s voice-activated Alexa. Property Management Apps mainstream communication between tenants and Property Managers.
Offering apps and devices that can keep up with the virtual age may not only prove to be energy efficient (think of lights that turn off when you leave the room, or a thermostat that can be controlled remotely) but will also assure your tenants that you are making investments in sustainability that provides more convenience and comfort for them – all of which bolters the rent cost.
Energy Efficient Appliances
Considering that renters with tight budgets and who pay for their own utilities will be more concerned about energy efficiency, it will be well worth it to consider appliances that reduce energy consumption. Renters consistently rank energy-efficient appliances as the top amenity request. We’ve reviewed other improvements that can be made to the property, but when upgrading an older home, the appliances are an easy Green win to list in your advertising!
Location, Location, Location
Millennials and Gen Z are known to prioritize sustainability and to invest more in experiences than property. Sustainability isn’t just about what construction materials are used, what programs are offered, and what amenities are available – it’s all about where this is happening. This means that your property is most competitive when it’s in close proximity to where those experiences can happen. Cities like Fort Worth and Dallas, which have invested in its arts & culture as much as they have invested in their business, stand to gain much more attraction from Millennial and Gen Z renters. Properties that have high “walkability” (or at least a short drive) to nearby restaurants, nightlife and other venues can lean hard into the sustainability of their location when advertising to these younger generations.
It’s important to note that newer complexes are automatically more energy efficient than older ones due to the continuing improvement to construction material. No need to shy away from how much more “green” your multifamily unit is, however! In hot markets like the DFW, you will want to list every energy-consumption-reducing amenity and feature that you have!
Another trend to consider is the increase in the prominence of the electric vehicle. Six utility companies have formed an electric highway coalition that aims to place charging stations on major highway systems on the Atlantic coast, in the Midwest and South, and in the Gulf and Central Plains regions. There are tax credits for buying electric vehicles – as well as for property management businesses that choose to install electric charging stations for their tenants.
If the demand is there, and eventually, it will be – you’ll want to be on the ball to provide this amenity for your tenants, considering that most EV charging happens while drivers are at home.
Understanding the consumer is the key to any business, and in property management, that means knowing your renter! While housing is a necessity, remember that your property is a competitive product and an investment. Ensuring that your property is at the top of its marketability game secures you the renters you need to thrive!
Unsure of whether or not you’re taking the right steps to maximize your efficiency, marketability & (most importantly) your bottom line? Contact us today!
Frontline Property Management has the experience, the staff, and the skills to help you get the most out of your investment!
Choosing a Real Estate Market
The Dallas / Fort Worth real estate market, where Frontline Property Management does the majority of our business, is one of the hottest real estate markets in the US – and that’s even considering recent shutdowns and other issues caused by the pandemic. But what makes a market a good one to invest in, or to convert empty property into rentals in, and how do you determine if it’s right for you?
Study Population Growth (& Watch What Millennials Do)
The housing market isn’t the only thing that’s booming in the Dallas / Fort Worth area. We’re on track to have the most new residents of any metro area through the end of the decade. That’s not just native growth – due to low mortgage rates and other influences we’ll discuss, more people than ever are moving to the Dallas / Fort Worth area.
Where people are moving – especially millennials, who make up the majority of the workforce – there will be a demand for housing. The way things are working out for the largest portion of the population, we can expect that renting will be the most common form of housing financially available and affordable. (That’s where you come in!)
Quality of Life
There’s a reason some small towns are struggling to thrive and suffer housing depreciation while places like DFW are experiencing a skyrocketing population: accessible and diverse activities. The Dallas / Fort Worth area boasts of things to do! Everything from parks to the arts can be found, and everything in between. These are very important to millenials, who will more readily take a job in a city with entertainment, public transportation, and affordable housing over a market that has very cheap housing but not much else. After 2020, you can expect that millennials will emphasize connectivity.
For this reason, among the others, the home appreciation in DFW is expected to do nothing but climb.
Of course, there are a lot of nuts and bolts in the property management machine to consider! Frontline Property Management will help you evaluate your rental property and the market that it’s in, down to the competitive pricing of the neighborhood. If you haven’t yet invested in a property in the DFW area yet, but would like to, we’d be more than happy to discuss helping you build and manage a portfolio with us!
Do you have a property that you need help with? Just fill out this form and we will reach out to you!
How to Prepare for Severe Weather: Tenant Communication
When it comes to property management, you have to be proactive and not reactive. As we touched on briefly in our previous blog, you should be sending notifications to your tenants at least quarterly, as the seasons change.
Communicating with your tenant is your first line of defense!
Although it may seem obvious to a local what the weather patterns are, we live in an ever-increasingly globalized world. Which means your tenants could be from out of state – or from another continent! Protect your property by informing your tenants diligently about upcoming weather expectations and how they relate to property management.
1) Draft a Seasonal Letter
You’re in the property management business, not comedy – you don’t have to keep your material fresh! Draft a letter to send out to your tenants that is applicable to the region your property is located in.
2) Do Your Part
The onus is not entirely on the tenant to maintain the property that they occupy. Sending an informational letter does not remove your responsibility as the property owner. Make sure that you are doing your part to keep the property safe via regular inspections, necessary updates, and repairs. You should see it as giving the tenant all the information and tools necessary to protect the property from severe weather.
3) Set Your Expectations
In your letter, make it clear that there are certain issues that you expect to occur, both to the property and the region at large. A common cold-weather issue (here in Texas) is that after months of disuse during our blisteringly dry summers, heaters that are being turned on for the first time sometimes emit burning smells that cause great concern to tenants. Informing your tenants will cut down on the phone calls to your maintenance team (or you, if you are managing your own property) and will give them a clear “next step” to take.
4) Create Actionable Steps
No one likes vague instructions. Inform your tenants in detail how they should be responding to shifting weather conditions. A simple to-do list will get the job done, so long as the items are specific and actionable, not just informative. “Water the foundation every week during the summer in accordance with your local grass watering ordinances” is much more specific than the guideless “Dry ground may cause foundation to shift”.
5) Put it in the Lease
It’s not only in your tenant’s best interest to have these seasonal letters written and sent or emailed to them – it’s in your best interest, as well! You should be keeping records of all tenant communications. This sets up clear expectations for both parties. If one side fails to meet the expectation, it will make it more clear who is liable for the costs of damages, should any occur. A letter or notice, however, is not a legally binding contract. The lease is. For this reason, it is advisable that the lease include language pertaining to the maintenance of property in regards to weather conditions. In a hot and dry region such as ours in Texas, watering the foundation is necessary property maintenance that prevents shifting foundations and all the trouble that comes with it. Including that specific action as a rider or in the main body of the lease obligates the tenant to comply.
Communicating with tenants is a priority on every landlord’s plate! Property Managers at Frontline Property Management, Inc. are in constant communication with tenants and have the support of multiple departments to streamline the process- so you don’t have to! If you aren’t sure what to expect in the Dallas / Fort Worth and surrounding areas – whether it’s the weather or market values – contact us today to find out!
Property Management Record-Keeping: First Steps
We’ve talked about why you need to have a focus on record-keeping when you’re managing a property, and briefly reviewed what documents you need to keep. (We will explore that further in this series.)
But how exactly should you go about keeping our records? What do you need to do?
We are at the intersection of increasingly streamlined emerging technologies and old-school filing cabinets. Old habits die hard, and you may find your work or personal office strewn with years’ worth of documents. Or collecting dust in metal drawers and hanging folders with labels long faded. In the 2020s, our society is heading in the direction of remote operation, system integration and an emphasis on a greener, more paper-free world – and that’s the world you need to be part of as a property manager!
Rather than compare the benefits of physical vs. digital record management, let’s agree that physical records are going the way of the floppy disk and that you must take steps towards digitizing your records.
Where to start:
Determine Who Your Document Retention Officer / Team Is
As we previously discussed, if you are a business of one person, then this will be your task. However, if there is an ability to delegate then you’ll want to assign a person to head your Document Retention Team. This person or team will be in charge of:
- Developing, implementing, and maintaining the records management program
- Establishing protocol for records management in accordance with the document retention policy
- Determining what will be taken care of by the company / employee / team and what will be outsourced to a third-party company or software
Inventory Office Records
Before you can go about how to manage your records, you need to know exactly what it is you have on hand. By reviewing the materials that you have been keeping, either physically or digitally, you can then determine whether something is a record or non-record.
A Record has information created or received by your organization in pursuance of legal obligations or in the transaction of business, and has value requiring its retention.
A Non-Record is exactly what it sounds like – something that doesn’t need to be kept! This includes reference materials, junk mail, and duplicate records. (Get rid of those ASAP!)
Create a Document Retention Policy
There are general guidelines to follow when creating a document retention policy, but the best way to make sure that your retention policy is tailored to you and understood by your document retention officer and / or team is to make one of your own and detail what will be stored as well as how.
This policy is a teachable document that can be referenced by anyone in the company. It will give you and any employees or assistance clear directives on how your documents are managed.
Establish Your Records Retention Program
Your Records Retention Program is the system that takes all of the above information
and puts them into action! You will combine your document retention policy with a schedule, so that you are retaining the correct records for the appropriate amount of time – no less, and no more. You are not archiving your records; you are storing them for exactly as long as they legally need to be retained.
Taking the time to lay the groundwork and establish best practices may seem either like overkill or a major pain (or both) but it is absolutely necessary in order to move forward with properly sorting every record that you have on your tenants, properties, tax information and more!
When in doubt, let a professional Property Management Company like Frontline sort it out! Any landlords in the DFW and surrounding areas who suddenly feel out of their depth should contact us today to learn more about how we can increase your bottom line by protecting your Frontline!
Tired of all the paper work? Have a property you need help managing? Just submit your information and we will reach out to you!
Property Management Accounting: (More About) Security Deposits
In our last post, we discussed how to properly account for security deposits in your financial holdings. Which bank account to deposit the security deposit into, and how and when to tax it as income is important, but is just the tip of the iceberg. Issues arise with the heft of details that lay beneath the surface.
Security Deposit Laws Vary by State!
There is no guarantee that the property you own is in the same state as you. Don’t assume that the security deposit laws are the same! You don’t want to be caught withholding funds due to overlooking a state law! Know the state (and city!) laws and ordinances that cover your property.
What is the Maximum Amount That Can Be Charged?
This amount can vary from one state to another, and there may be considerations for people over a certain age, tenants who have pets, and how long of a lease is being signed. Deposits normally range between one and two month’s worth of rent as a base.
In many states (such as Texas) there is no legal limit to what can be charged for a security deposit. However, the standard is one month’s rent plus any pet deposits that are due. Keep in mind that city ordinances may also set local limits on security deposits.
How Much of the Security Deposit Can I Keep?
Property managers everywhere have, at some point, struggled with a tenant over charges upon move-out. It’s important to know that normal wear and tear on a property cannot be considered damage that is deductible from the security deposit. If a carpet is worn from years of tenants living in a property, that is to be expected. However, if a pet damages or stains the carpet, that is abnormal wear and tear and can be deducted.
All reasonable charges for abnormal damages must be itemized and documented in a letter, for both your records and for the tenant. Under Texas law, if there are any deductions from the security deposit, this accounting letter must be sent to the tenant’s forwarding address with the remainder of the security deposit (if any) – or the bill if charges were in excess of the security deposit.
The goal is not to keep as much of the security deposit as you can – the security deposit is entrusted to you in good faith that it will be used to cover damages to the property upon move-out. This is why the security deposit is not considered income until after the damages have been assessed and the remainder returned to the tenant. It should be equal to, not more, than the cost of repairs needed.
When Do I Return the Security Deposit?
In Texas, the security deposit must be sent to the tenant within 30 Days of receiving the tenant’s forwarding address. This is to allow time for a final walk-through and assessment of the property. An exception to this is if the tenant vacated the property while owing rent, you do not have to send an itemized list of deductions.
There are penalties for landlords who do not return the security deposit promptly when due – if a tenant becomes litigious, they can rightfully be awarded $100, three times the security deposit, court costs and attorney’s fees. A big price for what could be a simple mistake!
Can a Tenant Use their Security Deposit as Last Month’s Rent?
The short answer is no.
While it is legal in some states, it is inadvisable to your business as a landlord. Security deposits may not cover one month’s rent if rent increased over the tenancy. You would be cutting yourself short in that regard. Furthermore, if there are damages beyond normal wear and tear, then the tenant will still be responsible for those charges but you will not have easy access to funds and may be stuck out in the cold, or have to take your tenant to small claims court.
In Texas, it is outright illegal for a tenant to withhold payment on the presumption that their security deposit can cover last month’s rent. The penalty to the tenant for this is three times the monthly rent, and whatever court costs and attorney fees were incurred by the landlord’s suit to recover the rent.
Landlords will be faced with these questions lease after lease. It’s in your best interest to stay informed, maintain orderly accounts, clearly state your expectations in your lease, and to abide by the laws that govern your property!
If that’s a bit daunting, team up with Frontline Property Management! We have an on-point accounting department and a full staff of professionals and Property Managers who stay up-to-date on the latest regulations and will handle all of the details so that you don’t have to!
Property Management Accounting Basics: Reconciliation and Redundancy
Humans are hard-wired to seek maximum reward with minimal effort. We are driven to find ways to get things better and faster while doing less work. We are also sometimes simply forgetful of details when we are focused on completing tasks.
In accounting, however, you cannot spare any details. Reconciliation is the process of making sure your bank account statements match the ledger for your business, dollar for dollar, penny for penny. If it’s off, then you’ve gone wrong somewhere.
First, you want to create the habit of reconciling weekly if not daily, and at the very least monthly (depending on the size of your business). It’s a lot easier to track down a discrepancy, transposed number in a transfer or a missing deposit someone forgot to enter – among a litany of other things that can go wrong – if it happened within the last thirty days and not sometime in the last half a year.
To combat the inherent nature of people to play fast and loose with the details, it’s also important to incorporate redundancy in your accounting. In the creation of your Chart of Accounts, you’ll need to properly set up accounts and sub-accounts that best reflect the nature of these transactions. You will also need to create Journal entries for any transfers made between accounts. Think of your Journal as a “dear diary: I moved this money from bank Account A to bank Account B because of reason X”. You can cross-reference the Journal entry as a memo line when you make the “real” transfer in your bank account.
Multiple layers of reporting will make your life easier and your accounts simpler to manage. Depending on your state, your property management business may also be subject to audit. While audits aren’t fun, they’re even less fun if your reports aren’t in order. The Trust reconciliation report is a collection of reports that are commonly required to pass audits conducted by state property management licensing boards.
The report combines Bank Reconciliation and Bank Account Balance Breakdown. Reconciling on a regular basis makes this monthly reporting a breeze! In property management, there are plenty of factors that are out of your control, but proper accounting isn’t one of them. Be diligent, detailed, and redundant, and you will be able to make the best financial decisions to further your business.
Are you too busy to reconcile appropriately?
Of course, if this is overwhelming (and it very well may be) – don’t worry! If you’re too busy making deals to handle details, let a property management company like Frontline Property Management handle them for you! Our accounting department is focused on keeping your reporting pristine and your monthly reports rolling!
Let us know if you need help with your rental!
Property Management Accounting: Creating Your Chart of Accounts
Once you have decided which method of accounting you’re going to use,your next step is to set up your Chart of Accounts. At its simplest, your Chart of Accounts is a list (chart) of the different financial categories (accounts) you use for your property. This can take the form of anything from a written document or an excel spreadsheet to property management accounting software – which we highly recommend!
Your Chart of Accounts is a way to keep track of where your money is going and why. It is the foundation of your financial record keeping and lists every account that your transactions can be sorted into and whether that account is an expense (money going out) or an income (money coming in). The more accounts you have, the more complex your Chart of Accounts will be, but the more insight you will have into your cash flow.
For example, in a simple Chart of Accounts you can have an account that is “Utilities” that is labeled an “expense”. You could also then break down Utilities into sub-accounts: Water, Electricity, Trash, et al. Therefore, you can see every expense for exactly what it is when it leaves your bank account. Every account has a ledger, or a record of the transactions. The General Ledger maintains the balances of an account (such as “Utilities” from the previous example) and sub-account Ledgers, should you choose to use them, are line-item transactions within that account (specific Utility bills invoiced and paid). Your Chart of Accounts is the organizational tool for your ledger, and is not the ledger itself.
A more detailed Chart of Accounts also manages assets, equity, and liabilities and employs block numbering to do so. Block numbering allows you to organize your accounts by type with the sub-accounts that allows for line-item accounting. Block numbering also makes room to easily add in accounts as you grow your portfolio. This way, you can see how your properties are doing individually and how your business is doing on the whole.
Think of your Chart of Accounts as the easiest way to communicate your business with your accountant or banker, and the best guide to making financial decisions for your future! This is an example of how a detailed Chart of Accounts logs its financial transactions.
Are you too busy to manage a complex Chart of Accounts?
Let Frontline Property Management, Inc handle it for you! We give you the detailed reporting you need to stay on top of your passive income by crunching all of the numbers ourselves. Consider us your property management accounting team!
Find out more about how we can help you manage and grow your property portfolio!