Sorting your Internal Processes Lesson #1

Lately, we are giving some tips on how to finetune some of your internal processes. This month, our focus is on Landlords with multiple properties.

So let’s look at:

How to Separate Statements for Landlords with Multiple Properties

EOFY is an opportune time for many things.

Cleaning up your accounts for one.

And another – reconfiguring how Owners receive their monthly statements if they hold several properties with your agency.

Truth is, there are many ways to display their statement. But depends on how they want to view their financials.

What do we mean by this?

Example 1:

You have a single Owner who owns an entire apartment block (Units 1-6) with 6 individual tenancies.

The Owner wants them on separate statements or they want them to appear on the same statement to make it easier.

Example 2:

You have an Owner with 2 properties in different locations. You manage both in your agency with the same fees. The Owner wants them either on the same statement or separate.

Our Tip

This pearler comes from my old PM days. Show your Landlord an example of two dummy statements when onboarding them as a new client.

I would give two options as an example. Receiving their statement showing multiple properties on the one statement or by separate statements.

When you don’t have the luxury of choice

Sometimes you won’t have the luxury of discussing statement setup with your Landlord. This can occur if:

a) You have taken over the portfolio or

b) You’ve migrated from a software platform that only gave one option. You are unsure of the alternate options available in the new software.

The next steps to take

  • Discuss options with your Owners
  • Check their current set up in your system
  • Look at what options are available
  • Watch tutorials from your software provider on the best way to manage moving forward
  • Make sure there are no held funds in the Owners account. Disburse to $0 balance
  • Implement a new statement set up on the 1st of July BEFORE receipting for the new Financial Year.
  • This way, your new Financial Year will commence with a clean slate.

The Pros and Cons for Separate Owners’ Statements

Pros

  • EOFY Statement for each property
    This can be easier and cleaner for the Owner and Accountant to read.
    Also beneficial if the owner sells one of the properties and keeps hold of the remaining, keeping individual statements for each.

Cons

  • If the owner has 6 properties, there are 6 statements and 6 EOFY statements = lots of paperwork to manage.
    There may be extra costs incurred for sundry and management fees depending on the agency agreements.

Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 23 years’ industry experience. Don’t trust just anyone with your trust accounting. Book an appointment with an End of Month Angel today.