When your commercial or retail investment property is managed by others, and particularly a professional property management company and or manager, you will get reports each week and each month that should be interpreted for both opportunities and results. The reports are important, so take the time to know the layout of each and what is in them.
Here are a couple of important facts you should know about these reports:
The different property management software programs used by Agents and Brokers today produce a variety of reports. The important thing here is that you get the reports that you really need and want. The information that comes to you in those reports should be useable and easy to interpret. Ask for a sample of a ‘typical management property’ and then decide how those property reports can work for you.
Each month and certainly at month end, the property manager should be reviewing those reports for activities and outcomes before the reports are sent out.
So, the message here is that your reports for your investment property are important; spend more time in reviewing them. Make sure that you are getting the reports that you require.
Whilst on this subject, it is also worthwhile talking to your accountant about these reports, to ensure that they are being correctly used and translated into your true tax position.
Here are some of the typical reports that are available from most commercial property management reporting systems:
Rents paid – if you have several tenants in the one property, you want to see a clear split of rents paid by each tenant during the month to date.
Arrears – most properties will have arrears factors to work through at some stage; don’t let those arrears get out of control.
Outgoings – the tenants will likely be paying for some if not all the operational costs of the property, and that will be done via outgoings contributions.
Lease critical dates – most tenants will be occupying premises under lease conditions; some of those leases will come to an end and there will be important dates to watch and work with.
Vacancy report – know your vacancy ratios for your managed property and or portfolio; don’t let those ratios get out of balance to the prevailing market conditions.
Expenditure and Maintenance budgets – there will be cash flow matters to watch in both income and expenditure, so ensure that a budget has been set for you to control your gross and net incomes.
Tenancy schedule – given the leases that you have within your investment property, the tenancy schedule for the asset should be accurate in all respects for you to make informed property decisions.
Taxes and taxable income – we all pay taxes, and if you own an investment property, you will be paying taxes based on the passing and net income. Talk to your accountant to ensure that your financial reports are clearly describing your taxable position monthly in an accurate way.
Given this list, there may also be some other reports that you would like to see in your monthly reports from your manager.
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