KriyaGo - Blog #outsource lease abstractions

How lease audits can help you achieve your goals

Wed, 07 Sep 2022 09:00:00 -0400

As Financial Accounting Standards Board (FASB) released new lease standards, you must get a proper lease audit to stay on track. This has complicated the lease abstraction process, which is one of the biggest reasons you need to audit your lease. If you do not have all your data and terms in place, sticking to compliance and regulations can become a problem.

Your real estate strategy and leadership body need to assess their needs for a lease audit and immediately start. Only then will you understand, analyze and get usable data from your lease abstractions and smoothen your business plans. You need a team of lease audits to correctly take care of this process.

Are lease audits a blessing in disguise?

The process of lease audits might be complicated and seem redundant, but they are not. They can be handy to keep you updated on FASB standards and establish better tenant relations. There are many benefits beyond this that can positively benefit your system.

• Crucial for problem resolution

FASB constantly keeps updating their standards and guidelines, and you need to get your lease updated accordingly. It is a constant process, and a proper lease audit can help you ensure that all agreements are running smoothly. There are many complex clauses and terms in the agreements that are beyond comprehension for inexperienced. That can be a roadblock if you do not get an expert from the industry who has a working knowledge of comprehending and analyzing leases. A lease audit partner can help mitigate that in time.

• Better tenant relations

A lease agreement document forms the backbone of any new or old tenant-landlord relationship. If there are any faults, your tenant might mistrust you and permanently hamper the relationship. When non-experienced people interpret leases, they can come to various conclusions and end up in confusion. That is why a lease audit will help draw up concrete conclusions that are comprehensible for all parties involved. All terms of the lease will be simplified for you, and you can quickly resolve your problems with tenants before they curveball into a significant issue.

• Identify errors in the agreement

In reality, lease agreements are these huge bulky documents filled with errors opening you up for legal battles. These can be human errors, but they can end up losing a lot of money and your reputation. A lease audit can set the record straight before you go down that rabbit hole of harming your business.

• Efficient portfolio management

When you have to handle numerous properties and units, pilling up leases can make portfolio management difficult. When property managers have multiple duties coming their way, it becomes hard for them to keep track of legal lease documents. How about letting your property manager manage the properties while a lease auditor who knows these documents inside outdo the work? This will help you manage your portfolio better and even save up time for expansion.

• Better data management

A lease auditor can help you quickly identify data discrepancies between systems and straighten them out. They will also help you understand if your balances and payments add up and cross-check them with finances and account holdings. It will give you a chance to understand if your lease terms and clauses are profitable and where you have a chance for improvement.

• Perfect CAM Reconciliation

CAM is a major portion of any lease agreement, and this is where most real estate owners and managers lose money. A lease auditor will look into this part of the agreement to. They will ensure both you and your tenants keep up with your bargain ends to maintain a healthy relationship.

Why should you outsource your lease audit work?

You can get experienced help in this complicated task without employing them full-time when you outsource your lease audit work. These experts will know precisely where to look within those bulky documents to get the correct data for you. That is why more than 78% of companies worldwide feel good about outsourcing their work to partner firms.

• Third-party neutrality

Your tenants will gain more faith in you when you get a third-party outsourced lease audit partner. A third-party auditor is neutral to landlords and tenants and has no vested interest in benefitting either. This is the best way for you to go to reach a fair settlement.

• Uncover overspending areas

Your lease might have you spending more than you need. When a lease auditor takes a look at your business functions, they will help you realise potential areas of growth. Doing the lease audit internally will not let you find these faulty areas.

• Quick turnover

Trained professionals who are solely concentrated on your lease abstraction work are sure to have a quicker turnaround than your internal team. An inexperienced internal team will not have the right expertise and bandwidth to meet all deadlines and keep up with compliances at the same time.

• Latest tech usage

Human data entry errors are as high as 4%. That is a big area you can cover when you outsource your work. A proper lease audit partner will use a proper selection of top-notch technology and software to streamline the work. This will eventually benefit you in getting error-free work without paying to buy the whole software and install it.

Selecting the best outsourcing partner for your lease audits

In recent years outsourcing lease audits and getting accurate audit reports has helped companies save a lot of money. It has also helped build a lot of healthy and transparent tenant-landlord relations. You need to keep your goals in mind while selecting your lease audit outsourcing partner.

At KriyaGo, we have a team of lease audit experts and the best technology for you to leverage. We analyze and derive valuable data from bulky leases and find you the best industry insights to work with. We have experienced professionals to help you with all lease-related issues, from lease audits to lease abstractions. To find out more about our services, contact the team today. Book a consultation call and talk to us soon!

7 Clauses You Must Have In Your Lease Agreement

Tue, 11 Jan 2022 12:37:03 -0500

If you're planning to lease out your property, you may have to consider getting a lease agreement prepared before looking for tenants. Lease agreements are written documents to safeguard your property from damages or any legal issues with the Tenant. All the clauses mentioned in this agreement should be crystal clear and easily understood by potential tenants to avoid confusion.

Every lease agreement will be different depending on several factors such as property type, area, state laws, and more. However, some clauses are common in all the lease agreements that are a must-have. Let's take a look at each of them here.

7 Must-have clauses in your lease agreement 

Preparing a lease agreement can be a daunting task, but here are the seven clauses that you must have in your contract before leasing your property to tenants. Knowing what to include can ease the process and cut down the time required to write your agreement. Here are the seven clauses to include in your contract.

1. Security deposit terms

As the name hints, security deposits are promises made by the tenants to keep your property secure and cover-up for damages done by the tenants. As a property owner, it's important to add this clause in your lease agreement to reduce your liability in case of any events. Here are some of the things to add to this section:

The exact amount that should be deposited. 
The interest rate and the way you store the deposit
Add how you return the deposit amount

You should also specify the reasons in case of deducting the amount

2. Maintenance and repair clause

Maintaining your properties is crucial, and it's an ongoing process. As a landlord, you will be responsible for recurring maintenance such as gardening and plumbing. Specify that in your lease agreement and also the steps to place maintenance requests when the need arises.

Adding this to your lease agreement can reduce the chances of huge damages to your property and ensure all the maintenance requests are placed and inspected on time. Ensure you mention every detail clearly in legal jargon and simple words so that it's easily understood by the tenants to avoid misunderstanding.

3. Rent payment clause

It is a must-have in any lease agreement. You should add the entire lease amount along with the rent charges every month and the due date in your contract. 

The Tenant agrees to deposit $xxxx as security and agrees to pay $10,000 rent to be paid like $833 per month due on the 5th of each month. A grace period of 5 days is allowed, but payment after the 10th of each month will result in additional charges, and the Tenant must pay $30 as an extra for every late payment. Upon signing this agreement, the Tenant agrees to comply with these terms.

4. Duration of the lease

Having a well-worded written document and getting it signed is one of the most crucial steps before leasing your property to tenants. You need to specify the duration of the lease along with the due date. It's also important to add the notice period. It goes something like the example below:

"The lease on the property begins on March 10, 2021, and ends on March 31, 2022."

5. Renewal clauses and other responsibilities

One of the must-haves in your lease agreements is the lease renewal clause. It's important mainly because if the tenants choose to stay after the set period, it's important that they notify you regarding the same.

If they decide to leave the property, tenants should inform you a month or two in advance, so it's easy for you to fill the vacancy during the time. Specify the renewal terms, and for new lease agreements, KriyaGo can help you do just that. We help you automatically renew lease agreements to ease the process. 

6. Restriction and breakage clauses

You need to write whether pets are allowed or not and regarding any such restrictions in this step. Some landlords have a strict no pet policy, conditions on excessive noise in and around the property, and many more. If there are any such restrictions, you need to add them to your lease agreement as it prevents covering up damages done by pets.

It also prevents disturbing the neighborhood with loud noises or pet litter on your property. You should also include breakage clauses in the agreement to avoid paying more for damages done by the tenants on your property. It clears any misunderstanding by having a legal written document signed by both parties. 

7. Termination clauses

As the property owner, you have the right to terminate the Tenant during the term. In case of any damages or misconduct, you can notify your Tenant to leave your property, so it's always better to have an agreement signed. Termination clauses specify certain conditions under which the Tenant can be terminated.

Finally, make sure all your property and tenant details are mentioned and that the Tenant has read the whole agreement before proceeding to the next step. It’s important that you do a thorough background check and Here's an example of what can be written at the end of your lease agreement:

By signing this, the Tenant agrees to have fully read, understood, and adhere to the terms and conditions mentioned in this lease agreement.

Create your Lease Agreement with KriyaGo

If you're having difficulty creating a lease agreement or lease abstraction for your real estate business, let KriyaGo do it for you! We can also customize property management software for your business, prepare lease abstractions, back-office accounting, and a lot more.

Our team of experts will help you find the best solution for your property business and ensure a smooth flow of processes, right from hiring tenants to creating automatic lease agreements for you. To know more about it, talk to our team of experts today!

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How Outsourcing Helps With Real Estate Business Growth

Tue, 12 Oct 2021 09:00:00 -0400

Property management is a demanding job. Unlike a 9 to 5 job, managing properties requires you to work at your client’s convenience. On top of that, property managers also need to handle marketing, legal work, maintenance, and other tasks. Looks challenging? You can overcome most of your business obstacles through outsourcing.

Apart from managing your time better, outsourcing can also help your business grow. Wondering how? We have compiled the top ways outsourcing can improve a real estate business. Read on!

1. Save Money

A good real estate business relies on effective financial management. Along with generating profit, it is also essential to plan and utilize cost-effective strategies that facilitate business growth.

Cost-cutting is the top priority of 59% of real estate companies that outsource their tasks. For a business that is restricted in terms of space and money, outsourcing can be the ideal way to afford additional staff.

Irrespective of the size of your company, you can outsource your tasks. Service providers also offer various packages for different budgets. Depending on your needs, you can hire them on a per-project basis or monthly basis. They are also reliable if you need more staff to handle your work. The cost flexibility that comes with real estate outsourcing is something you cannot get with an internal team.

2. Focus on core tasks

As we discussed earlier, the real estate business is all about time management. Most common real estate tasks include maintenance & repairs(80%), rent collection(80%), and advertising(77%). As a property manager, you need to focus on these core tasks for business growth.

While non-core tasks such as accounting and financial reporting are important, they are better handled through outsourcing. Clearing out your schedule to accommodate important tasks can help you build better business strategies. Whether you want to market better or upgrade your maintenance, you will have enough time to improvise your business.

For example, by outsourcing lease abstractions, you can focus on rent collection which is a direct revenue-generating task. You can pay attention to any missed payments or improve the way rent is collected from tenants.

3. Access expert resources

Every real estate business has activities that require different areas of expertise. If you manage every task through an internal team, this can be expensive. According to the Association for Talent Development, organizations spend an average of $1,252 on training a new employee. For every additional employee you hire, the cost multiplies. This drains the revenue that could be used to develop other real estate tasks.

By outsourcing, you can skip the training phase to directly access industry experts. Service providers have trained staff to handle outsourced tasks. This gives you the benefit of hiring an expert by spending only a fraction of the money. This money can instead be directed towards business-growth initiatives.

4. Efficiently manage paperwork

As your business grows, it also brings in more contracts, leases, and general paperwork. Confused with the legal jargon? Hire service providers to manage paperwork. Companies like KriyaGo handle lease abstractions, lease accounting, and CAM reconciliations. All these tasks are complicated and time-consuming.

With experienced staff and the latest technology, outsourcing companies can manage paperwork effectively. They know exactly what to include in lease abstractions or how to reconcile CAM expenses. This not only saves you time and resources but also legally safeguards your business.

5. Facilitate remote work

The remote working trend is rapidly increasing as people realize the full benefits of working from home. According to a recent Upwork survey, the growth rate for remote work will reach 65% over the next five years.

Outsourcing offshore is an excellent way to encourage remote working in real estate. It overcomes the time-crunch and staff shortage to give you the required results. Instead of managing an entire team, you need to only deal with service providers who provide you monthly or yearly reports on your work. This helps you save money, time, and also working space.

6. Increase productivity

Every real estate business needs productive employees to achieve desired growth. Consider an in-house accounting team. Depending on your revenue, you hire one or two accountants. No matter the workload, your team of two has to handle all the accounting. The unnecessary work pressure can lead to decreased productivity. Also, if any of your employees fall sick or go on leave, your work will suffer.

By outsourcing, you can overcome this problem. Service providers have enough staff to handle varying amounts of workload, even if one of the employees can’t work. They are also experienced and have access to the latest technology. This makes them more efficient and productive.

7. Scale easily

A growing business requires more staff to handle the increasing workload. Hiring new employees every time isn’t feasible. By outsourcing, you can effectively scale the services depending on your requirements. If you have more clients or properties on your portfolio, your outsourcing partner will assign more people to handle your work.

Similarly, if your workload ever decreases, then there is no hassle of laying off an employee. You can simply scale down on your outsourcing services.

Service providers also charge you according to the work done. But an in-house employee is always on the company payroll, irrespective of the amount of work assigned to them. By outsourcing, you can scale your business without worrying about additional costs.

KriyaGo: Your perfect outsourcing partner

Want outsourcing services for your flourishing real estate business? KriyaGo provides outsourcing services for back-office accounting, lease abstractions, lease accounting, and CAM reconciliations. We understand your requirements and build an outsourcing strategy for you.

Our employees are industry experts having experience in relevant fields. Whether you want to frame lease abstractions or manage your CAM expenses, we are the right partner for you.

We also help our clients build property management software according to their requirements. By integrating state-of-art software like Yardi, Procore, and SAP Concur, we can create a single platform for all your real estate needs.

To know more about real estate outsourcing, book a free consultation with KriyaGo!

Common Lease Abstraction Issues and How To Solve Them

Fri, 03 Sep 2021 09:00:00 -0400

Leases are bulky but essential documents in every real estate business. These documents carry important clauses, making lease management even more difficult. Reading leases every time a tenant wants to sign them can be time-consuming. Instead, lease abstracts serve as a summary of the original document. These abstracts contain important clauses which make them easier to understand.

Even though they sound simple, lease abstracts are complicated to prepare. Since they represent the lease, abstracts need to be accurate and contain all the details. If you want to prepare lease abstracts for your properties, our guide on how to solve the common lease abstraction issues will help you.

Why are lease abstractions important?

Lease abstractions are not mere summaries of leases but also have numerous benefits for the real estate business.

Easily explains lease terms to tenants. Tenants can skip reading the bulky lease and choose the abstract which contains the extract of the same information.

Improves investment by providing information to calculate risk factors. Lease abstracts collect all information in a single place that lets you study it easily and determine market risks.
Determines values of the portfolio by collecting relevant information.
Lease abstracts are easier to present to clients. They can go through and understand your property management process without reading complex clauses.

Typically, a lease abstract is about 3 to 5 pages long. To condense the lease within these limits, employees have to face numerous challenges.

Common lease abstraction issues

Compliance with lease accounting standards

The Financial Accounting Standards Board (FASB) has released new lease accounting standards. This has set new guidelines for lease data management, making abstractions more complex. Real estate companies without organized data management plans find it difficult to meet these new guidelines.

Lease abstracts need adequate data to comply with the new standards. But many real estate businesses lack the storage and information to ensure FASB compliance. This can be a significant lease abstraction challenge. If the abstract doesn’t comply, then the business can face legal consequences. Adding to it, FASB standards also change from time to time, which means the leases need to be updated.

Bulky documents

Bulky lease documents and complex terms are the hardest to abstract. Since lease abstracts need to be short, you have to find important clauses from the document while making sure nothing is left out.

The real estate industry also uses traditional methods even if it is slowly upgrading to technology. So, most leases are manual work that requires employees to study them extensively to prepare the abstracts.

Moreover, disorganized data requires employees to scour through multiple documents to obtain the required information.

Extracting important data

Identifying which clauses are important is another challenge of lease abstractions. Bulky leases have more important clauses but the abstracts still need to be short. It is a task to summarize bulky leases by filtering additional information.

A lease abstraction typically includes:

The property address and basic tenant information.
Rent and security deposit information.

Any information regarding tax, maintenance, and CAM.
Lease renewal and termination clauses.
Lease termination clauses

Apart from these, any other information that can impact tenancy should be included in the abstract. Companies that do not create and store leases online face difficulties while recovering relevant data for their business. Excluding even a single important detail in the abstract can have a negative impact on tenants.

How to overcome these challenges?

Lease abstracts are challenging. But with the right resources, you can create accurate, legally complying abstracts. The below solutions help you clear your lease abstraction issues and also create better abstractions.

Use the latest technology

Lease data management is the basic challenge property managers encounter during abstractions. If you manage leases on paper or spreadsheets, then it is time to upgrade to new technology. According to Market Watch, 88% of spreadsheets have errors. Instead, you can use specific software to organize and manage data.

You can choose off-the-shelf software that is designed to suit most businesses. Or, you can integrate multiple software on a single platform, which lets you customize the software according to business needs. Companies like KriyaGo help integrate top property management software so you can leverage all the features in a single place.

Update lease data

Currently, leases are made in compliance with the FASB standards. As times change, these standards are also continuously updated. Though lease abstraction is a one-time process, it needs to be regularly updated with the latest information. This is to ensure that you are legally safe and disclose all the information as directed by law.

Tag the abstracts

Lease abstracts have their origin in the lease documents. If you are making leases online, then it is easy to tag any important terms and clauses in the abstract. This will help you look up the clause in the lease.

By keeping track of what information goes on the abstracts, you can also change them according to standards. Bookmarking also helps you review and remake abstracts, in case they are too long or short.

Outsource lease abstractions

The best way to create perfect lease abstracts is through outsourcing. Managed service providers have expert employees with relevant work experience. These experts identify important clauses and create lease abstracts suiting your requirements. They can also update leases from time to time and keep track of any changes in the FASB standards.

Outsourcing lease abstractions can also help you save money while ensuring quality. Good abstracts have a positive impact on tenants and help you build a better brand image.

Create perfect lease abstract with KriyaGo

Can’t manage the bulky paperwork? Let KriyaGo handle it for you! Our experts have relevant experience in creating lease abstractions for real estate businesses. Regardless of the size of your business, we can strategize and help you with lease abstractions and administrations. We also help our clients with back-office accounting and CAM reconciliation.

KriyaGo also integrates real estate software to create bespoke software for businesses. Whether you want better CRM software or want to organize your data, we have the right tools for you. Integrate more solutions and streamline productivity the easy way. Take a look at KriyaGo Blox today!