Many small property management companies don’t use proper accounting software for bookkeeping, specifically tracking receivables (rent due).
I’ve used more than one property manager over the years that used Microsoft Excel spreadsheets to track how much money was due from each tenant each month, how much they had paid, and any balances owing.
The problem with spreadsheets is that they are prone to simple mistakes, such as mis-typing a formula for calculating rent due for a tenant.
And in my experience, these typos usually happen in such a way that you are being paid less than you should be receiving, and the property manager is keeping the balance.
That would never happen if the property manager was using proper double-entry accounting software.
In fact, I’ve seen this problem so many times with various property managers, that I now recommend investors track all their rent receivables in their own accounting system.
That way they can track, right down to the penny, exactly how much each tenant owes them and eliminate lost rent. You might think that this is an isolated problem, but I find it’s quite common with smaller property management companies (and even some large ones).
Like these tips?
Leave a comment below and let me know what systems you have in place for your book keeping!