One large task of a property manager is handling funds. This involves making informed decisions about all aspects of the property, which goes past physical assets. Property managers are in charge of things like rental income, security deposits, reserve funds, and writing checks on the owner’s behalf.
The property manager is in charge of picking the date that tenants will be responsible for paying their rent. They are also in charge of determining if the tenant pays for the current month or if the property will hold the check for a month. The property manager may also be responsible for setting up a direct deposit if the property wants to offer that feature to their tenants. It is recommended that the rental revenue is in the bank account collecting interest rather than in the bank manager’s account.
Taxes and Accounting
The property manager may make the decision if the company will provide an IRS-1099 and a summary profit and loss statement when tax time rolls around. The property manager may also be responsible for having a paper trail when it comes to accounting. This may include keeping detailed documentation and records. The goal is to make everything crystal clear if an audit were to occur. A desirable company keeps copies of all invoices and is happy to provide them upon request. This helps with legal issues and taxes.
Income and expense statements should be reported each month. It is advisable to avoid working with companies who report any less than this. Something else to watch out for are income and expense statements that are viewable online. This makes the documents a lot more accessible than just a paper copy. Lastly, it is important to ask for a copy of the report beforehand because you are giving the company a chance to show if they are able to give you a report. The report can contain fake or “dummy” data because you are just inquiring to see if they are willing to share a report with you. If they are not willing to share a report, re-evaluate your options. If they are willing to share a report, make sure it is organized and easy to read.