Spotlight on … Accounting

The single most important part of the management of your home is the organization of your money. The Accounting Department, while often in the background, is constantly working on your behalf to ensure you are receiving your rent and you will be prepared to file your tax return at the end of the year. There are many intricate parts of your owner statement and expenditures that you will incur throughout the month and it is important to understand your owner statement.

Meghan McGrath, Accounts Supervisor, collects rental payments from the first   to the fifth of every month. We encourage all of our tenants to pay with automatic payments through their tenant portal but checks and cash are also accepted. On the 10th of every month Meghan pays you the disbursements that  are due to you. If we have still not received rent by the 10th you will be    informed that your rental payment will be late this month because of it. Also  please note that depending on which bank you use, it could be a couple days  before the payment clears and you can access your funds.

The monthly owner statement is created on the 11th of the month. It will cover  the period from the 12th the month before until the 11th of the current month.  This was a recent change we made at McGrath Real Estate Services, Inc. based  on your feedback. It allows you to see whether your owner payment was received and that it was dispersed to your account. On this statement you will see a detailed description of rent received, management fee charged, as well as any repair invoices that you were charged.  Please “Favorite” the URL for your owner portal to ensure you have easy access each month.

The management fee is a percentage of rent collected that is charged every month that your home is actively rented. Typically 9% of one month rent, you will see the management fee on your owner statement each month that rent is received. Please refer to Clause 5 Paragraph I of your management agreement for your specific terms.

For repairs that were deemed to be over $500, you should receive an estimate from Anatole Doak or Sean Clark in the Repairs Department. Upon receiving your approval, Repairs will meet with Neal Gallagher, our Accounts Associate, to discuss payment of that estimate. Repairs will contact you asking to send money so that we can pay the invoice within 30 days of receiving. When the work is completed and the invoice comes in, Neal processes it. The invoice will be attached to the accompanying work order. Once the invoice gets paid, a copy of the invoice will be in your owner’s packet on the owner’s portal. Neal pays the vendors every Friday. He will also pay the vendor on the 9th of the month, right before you receive your owner payment on the 10th. The reason for paying vendors every Friday is to maintain our policy with them and further ensure they keep our clients a high priority.

Certain charges only occur when your lease is renewed or we re-market the home. These will be classified as “Re-Leasing Commission” or “Commission” on your owner statement.

The Re-Leasing Fee (for renewals found on page 4 clause G of your management agreement pays for the monitoring and renegotiation of your existing lease. Under this fee we are negotiating not only to renew the contract, but we are pulling comparables for your home, making sure to see if you are at market value and working on your behalf to ensure the paperwork is signed and the tenants are secured for another year or longer.

Example of an Owner Statement

If your home went on the active rental market, an application accepted and a lease signed, you are charged the “Commission.” The commission is equal to 90% of one month’s rent or a full month’s rent if the lease is longer than two years. This fee is applied not only for the marketing, processing and lease creation but also a part of that commission is given to the procuring agent who brought in the tenant.

Miscellaneous charges that you may see during your time with us could include utilities charges and service charges if you have a lawn service or any other type of recurring service you have contracted.  At the end of the year your IRS Form – 1099 is prepared as well as a cash flow statement. The statement breaks down everything we have paid for on your behalf (repairs, etc.) as well as all income you have received. It is important that if you should have receipts from repairs that were not through McGrath Real Estate Services, Inc. or your total HOA/COA dues (which McGrath in most cases does not pay for) to make sure that you add these totals to your end of year tax filing because they will not be included in the 1099 and cash flow statement we send to you. If you ever have any questions regarding your owner statement, rental payments or your end of the year 1099 please contact our Accounting Department at Accounting@McGrathRealEstate.com

Comments

  1. I am impressed with this web site, really I am a big fan.

  2. Keep up the excellent piece of work, I read few posts on this web site and I conceive that your website is real interesting and has got sets of superb information.

  3. Do you have a Facebook fan page for your site?
    Ron

  4. My brother recommended I might like this web site. He
    was entirely right. This post actually made my day. You cann’t imagine just how much time I had spent for this info!
    Thanks!

  5. I think this is among the most significant info for me.
    And i’m glad reading your article. But wanna remark on few general things, The web site style is wonderful,
    the articles is really nice : D. Good job, cheers

Speak Your Mind

*