What is NOI in real estate? Net operating income, or NOI, refers to the income generated by a property after deducting operating expenses, which include property taxes and insurance, utility costs, and repair and property management fees, but before debt service, income taxes, depreciation, and capital expenditures. The formula is simple: NOI = Effective Gross […]
Before they read anything else you send them, a lender or a surety reads your WIP schedule. Work in progress accounting is the monthly discipline of comparing, job by job, what you’ve spent, what you’ve earned based on progress, and what you’ve actually billed, and reporting the gap between the last two. That gap, the […]
After purchasing a property, many investors ignore the monthly cash flows and focus only on appreciation. This is an acceptable strategy until the market sees a rate hike, rents remain stagnant, or the property incurs several costly repairs over one year. This often leaves the owner in the position of having to write checks to […]
A messy chart of accounts is one of those problems that looks harmless right up until it isn’t. An owner asks why their statement is different from what they expected, and all of a sudden, no one can find where a repair bill actually got coded. That’s usually the moment someone finally sits down and […]
Every commercial property manager experiences the same pain. During the reconciliation season, a tenant receives a statement, and shortly after, the phone rings. This time, the question is about why their share for repaving the parking lot increased. Often, the number is in fact correct. However, there are times when someone missed a lease clause […]
Ask any property manager who has faced a state real estate board over a trust accounting violation, and you’ll hear the same thing. Roof leaks and problem tenants are not what sink a business; it is the money. The money that belongs to someone else. Managing rental properties means handling a lot of cash that’s […]
AI is great for transaction-heavy tasks in property management like processing invoices, reconciling bank statements, and generating standard reports. However, human accountants are required to handle the tax strategy, disputed transactions, and advisory tasks as well as give the final sign-off on the books. This article aims to define the boundary for each of these […]
Property management automation has a positive financial impact on rent collection, bank reconciliations, and owner reporting. With automation, the main risk is at month-end close and in trust accounting, especially when people assume the software is working properly. This article clearly explains the pros and cons, with real numbers attached.