Property management is the key to success with managing any rental property in Portland Oregon, or elsewhere in the United States, and one of the key factors to professional property management is accounting.
Sadly many owners, and property management professionals, don’t place as much importance on accounting as they should and they ultimately are setting themselves up for financial failure or lawsuits.
In part 3 of The Advanced Guide to Property Management we will offer you several tips you can use to streamline accounting so that this aspect of managing your rental property portfolio becomes as efficient as managing other investments you may have.
Set Up a Program for Spending
Although spending is a necessity for anyone who owns or manages a portfolio of rental properties in Portland Oregon, or elsewhere in the United States, it can be something that can cause any rental property portfolio to be managed inefficiently, especially if there isn’t a program in-house for how spending decisions should be made.
If you have more than one person managing your rental property portfolio you should develop spending controls, and also stipulations for larger purchases, so that decisions for spending will be made efficiently, every time, instead of on the fly.
Create an Approved Vendors List
The next step to streamlining your accounting is to standardize your spending by creating a list of vendors in your local area, that you know & trust, for small spending decisions that have to be made like maintenance and repairs.
For larger items that have to be purchased like a refrigerator, you should develop a list of approved vendors for appliances so that your employees will know where to purchase items that are needed for your rental properties without having always consult with you first.
You have To Forecast
Regardless of the size of your rental property portfolio, you always should forecast what your income and expenses will be in the future. This is important especially during the winter months when many cities like Portland, Oregon, have to deal with extreme rain, or snow, and more expense money will be needed to deal with these potential problems.
Instead of dealing with risks or problems as they arise, you should forecast to be ready for problems so that you can manage them when they occur, instead of having to move money between accounts to take care of problems.
Always Share Your Data
Another part of successfully managing a portfolio of rental properties is having the ability to share financial data, including accounting reports, with other employees when needed. To do this you should purchase the right accounting software and make sure that your financial data is able to be shared with other employees in your organization when you utilize cloud programs like Microsoft OneDrive, Google Drive or DropBox.
Digitalize the Paper Trail
Thanks to the Internet, it’s easier than ever before for any property owner to digitalize their paper trail so that instead of having the responsibility of making copies of paperwork, or receiving paper bank statements, you can simplify your online life by requesting online bank statements and receipts via email.
Not only will digitalizing every financial aspect of your property management portfolio simplify your life, it will also enable you to keep your desk free of clutter and also help you do your part to save the environment.
Establish Procedures for Tenants Who Don’t Pay Their Rent
As someone who owns rental properties in Portland, Oregon or elsewhere in the United States, it’s always unfortunate when someone is unable to pay their rent and falls into default.
If you make the mistake of treating one tenant different than the other when they fall into default, you are ultimately going to set yourself up for a potential discrimination lawsuit, this is why you should establish procedures for tenants who don’t pay their rent.
Doing this will enable you to avoid any threat of discrimination from tenants and ensure that any employees that you hire the future will follow the same procedures when a tenant falls behind on their rent.
Keep Accounting for Each of Your Properties Separate
Over the years as your portfolio of rental properties grows, one of the most important things that you should do is establish a budget for each property that you own. Doing this will enable you to correctly and accurately follow or track profits/losses, income ratios, revenue streams and more important of all, protect yourself legally.
Hire Professional Property Management
Last of all, but most important, as your portfolio of rental properties grows, another most important thing that you should do for your business is to hire professional property management company.
Hiring a professional property manager like Property Management Systems, will enable you to streamline all aspects of property management, including accounting, and make your life a lot simpler and easier, so you can do what you do best, grow your portfolio of rental properties and generate more revenue from real estate.
To learn more about the professional property management services that we can offer you, contact property management systems today by calling us at (503) 515-3170 or click here to connect with us online.