Ep015: What Your Accountant Wishes Your Property Manager Knew – What to Expect from Your Property Manager (Part 8)

The Landlord Profitability Playbook Podcast

In part eight of the What to Expect from Your Property Manager series, Chris McAllister, Laci LeBlanc, and Gretchen Mitchell sit down with accounting expert Jill McGregor to demystify the financial side of property management. This episode is packed with actionable insights for both property owners and property managers, focusing on the critical role of accurate accounting, trust account management, and financial reporting.

Whether you’re a seasoned investor or new to property management, this episode provides practical advice on ensuring your property manager supports your financial goals while maintaining compliance and transparency.

Key Takeaways:

1. The Role of Monthly Financial Statements:
   • Property owners should expect clear, consistent, and detailed monthly financial statements from their property managers.
2. The Importance of Trust Account Management:
   • Trust accounts ensure owner funds are separate from property management operational funds.
3. Key Questions to Ask Your Property Manager:
   • How often are financial reports provided?
   • Can you show me examples of the reports I will receive?
   • How do you handle capital expenditures vs. monthly expenses?
   • What measures are in place to ensure compliance with state trust account regulations?
   • How is prepaid rent handled in end-of-year reporting?
4. Tax Compliance for Owners and Contractors:
   • Property managers should issue 1099 forms to contractors and property owners as required by law.
5. Owner Portals and Transparency:
   • A secure owner portal with access to historical data, tenant ledgers, and financial reports is critical.
6. The Cadence of Accounting:
   • A consistent accounting process prevents errors, facilitates accurate reporting, and fosters trust between owners and managers.

Actionable Steps:

1. Ask the Right Questions: Use the provided list of questions to evaluate your current or prospective property manager.
2. Understand Trust Accounts: Learn how your property manager handles trust accounts and ensures compliance with regulations.
3. Stay Educated: Familiarize yourself with basic accounting principles, including the differences between capital expenditures and monthly expenses.
4. Monitor Prepaid Rent: Ensure your property manager educates you on the tax implications of prepaid rent.
5. Review Reports: Regularly review your owner statements and ensure they align with your investment goals.

Resources Mentioned:

• AppFolio – Property management software offering owner portals and comprehensive financial reporting.
• Loom Video Walkthrough of the Owner Portal – A step-by-step guide to understanding the features of ROOST’s owner portal.
• Sample Owner Statement

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