Trusted property management is vital to the long-term financial health of your investment property. The right property management company can attract quality tenants who pay rent on time, maintain the property, and minimize wear and tear. The right property manager can also save you a significant amount of money in maintenance expenses and taxes through careful monitoring of expenses, deductions, and accounting.
One of the most important aspects of trusted property management is proper handling of client funds through use of a trust account. This accounts for rental income, security deposits, and any other financial assets that belong to clients or owners of a managed property. This ensures that the funds are kept separate from a property manager’s personal or business accounts, reducing the risk of misappropriation and legal issues.
Property managers often open multiple trust accounts, or escrow accounts, for each property that they manage. These accounts are a necessary part of a property management company’s bookkeeping system, as they help to avoid any commingling of funds and allow for the proper tracking of each individual asset. Using software to track these accounts can make it easier for property managers to generate owner statements in an organized, professional format.
In addition, if an account is set up properly as a true trust account, it can be protected against judgments that could freeze a regular business bank account. If the account is frozen, it could impact a property manager’s ability to collect and pay expenses, as well as disburse funds to clients within the required timeframe. trusted property management