Property Manager QualificationsMany residential rental property owners are focused on the income and expense side of the equation since this is the primary cash flow that will impact their ability to pay all of their expenses associated with the property that they own. There is another element of property management that needs to be discussed. That is assets property management.

Some units will be rented without furniture. However there may be the basics such as fridge, stove, microwave and possibly a washing machine and clothes dryer. There will be screens on the windows, lights, faucets, toilets and chandeliers. This may seem extreme in terms of asset management. Some property owners have found much to their frustration that these things are missing when they come to inspect after the tenant has moved out.

Assets Property Management

Fully Furnished

At the other extreme, some rental units will come fully equipped with furniture. Beds and bedding, kitchen utensils and basically everything that a person needs to live. All you need to do is bring your clothes. This is a far more complex asset property management situation. As a result there are a lot of items to inventory and keep track of. Tenants look for cleanliness and good quality utensils, clean linens as basic requirements. Property mangers often hire cleaners to go in after tenants leave to clean the place. They will make the cleaning fee a part of the charge for renting the property. In addition to whatever is charged on a per month or daily basis.

In addition there may be other items in or around the property that must be tracked and included in the assets of the property. There are several reasons to keep track of all assets that are in and around a property. These are:

  • Track assets for tax purposes for deductions and depreciation purposes.
  • Track all assets for inventory purposes
  • Ensure nothing is stolen when tenants leave.
  • Track assets from an expense perspective to report on the books for income statements etc

Contract property managers  to track all of these items on behalf of a owner client. Or the owner client may track these things themselves. Use proper tools if the property manager is responsible for this element of asset management. In addition they must record the date of purchase or the date first entered into the record. Also the value of the item and a description of the item all linked to the unit that this asset is located in. Record all additions and removals as well.

Informal or Formal Asset Tracking

Some property managers will perform the function of asset property management informally and use a camera to record everything and perhaps focus on the major items in the home. Others may perform and maintain a very detailed asset property management function. Evaluate the benefits of a detailed inventory vs. the cost of maintaining such an inventory.

Most companies will focus on the major items and leave the details of smaller items to the owner. However asset property management is extremely important  for tax related reasons. Write off assets against income either from a depreciation perspective or from a total write off perspective.

Assets Property Management – Year End Reports

Year end reports will cover income and expenses for the property. These same reports will also show the total value of assets at the beginning of the year, the additions and deletions during the year and the final total assets at the end of the year.

Owners and clients will monitor all of these reports as part of their ongoing management of the property and the services provided by the property management company.

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