Posts Tagged Rental Property Statements
Delivery of Statements – Mail Hard Copy vs. e-mail
When our company started all of these processes and procedures . . . it seems bizzare to say it but . . . there was no internet or e-mail. All of the monthly statements along with all of the backup copies of invoices were packaged, posted and mailed out to each of our Owners. With the advent of e-mail and good quality scanners, we were able to move toward e-mailing our monthly statements to our Owners. The only thing that held us back was our Owners; many of whom were a bit technologically challenged and “didn’t do e-mail”.
As we moved forward though, we pushed to make the change. I am a big believer in processes and the more processes you have for the same outcome, the less efficient you are. I know that the time is quickly approaching when this will no longer be an issue and electronic delivery will be the standard for all property owners.
If you are just starting a property management firm, this is an awesome opportunity for you. You can start from the beginning sending your statements out electronically . . . and not be faced with converting to the new technology that will undoubtedly be here all too soon!
Payments to Owners
Assuming that our Owners’ property had a positive cash flow, we paid a disbursement out to each of our Owners at the time we issued the statements. Our software had a default setting that basically told it to send the Owner any remaining cash in the account after all expenses have been paid. This is not always a good thing; if you have a system like this, you want to be diligent to keep an eye on future anticipated expenses. Let me tell you it is not fun to have sent an Owner a bundle of money one month, then the next month you are trying to pay his real estate taxes and you don’t have enough money in the account. You then have the opportunity to ask the Owner to send the money back to you. This is not good for your credibility! We could also go into our system and set a cash minimum that we wanted to maintain in all of our accounts and it would automatically send the Owner anything in excess of that amount. It is all a matter of how you want to set it up.
Like mailing out hard copies of statements and technology marching on, making payments to our Owners has also undergone some changes. In the early days, we sent out live checks each month to our Owners. Now, with the advent of ACH or; Automated Clearing House, we can electronically transfer funds from our trust account to our Owners’ bank accounts, minimizing live checks, mail problems, etc. Again, we still had those Owners (probably the same ones that “don’t do e-mail”) “who don’t do electronic deposits”. We continued to work with them knowing that “someday . . . this too shall pass!”
Our hope and prayer is that this information has been helpful and sparked some thought processes for you. To discover more resources for managing rental properties for yourself or others, visit our website and check out our Books, Documents, Forms, Checklists, Videos . . . available in hard or immediately downloadable versions.
Thank you for reading!