KriyaGo - Blog #real estate business growth

The Top CAM Reconciliation Tips You Need to Know

Fri, 18 Mar 2022 09:00:00 -0400

Common Area Maintenance (CAM) reconciliation seems pretty simple at the outset. You just add up your costs and pitch them against your budget to close your books.

However, the reality is far from this ideal picture. Most real estate agencies are left scratching their heads trying to figure out what’s due from tenants or how much to pay back.

Undoubtedly, CAM reconciliation can turn out to be complex, especially for large businesses. You can lose your way in the expenses if you manage several properties.

However, worry not, as we have the best CAM reconciliation tips for 2022. You can implement them right away and optimize your CAM reconciliation process today.

Don’t Forget to Track Every Expense

CAM expenses can cover a wide range of activities. From general repairs to HVAC to the salary of staff, the expenses can become overwhelming.

In addition, property managers may make some expenses without recording them. These expenses may seem small at the occasion but can add up to a significant amount at the end of the year.

Each building you own or operate can thus have countless unaccounted expenses. Naturally, that will cause a dent in your profitability and eat up your revenues.

Therefore, it is necessary to track every expense you make for CAM, for all your properties.

Create a Single Source of Truth

It is much easier to track all your CAM expenses if you have a single source of truth. However, not all realtors or property managers follow this advice. They may maintain several spreadsheets or track their expenses based on vendor accounts.

The need of the hour is to switch to a single spreadsheet for each building. You can then get a ready source of data from a single source to perform your reconciliation.

Many real estate agencies today use digital solutions to manage their properties. However, these tools work in silos and don’t talk to each other.

As a result, the data in one tool is not available in others. So, your CAM calculations can go for a toss if you use several tools to track your CAM costs.

Therefore, use a single property management platform like MiCasa to manage your CAM reconciliation. Alternately, you can also integrate all your real estate tools to allow data to flow freely throughout teams and departments.

Be CAM Audit Ready

CAM expenses can form a large part of the lease payment for tenants. It can add up to become a significant amount as the price of goods and services increases.

For example, property taxes have increased by more than 2-times between 2009 and 2019. Services like pest control and security also experienced double-digit growth, as per the National Apartment Association survey.

As a result, your tenants can invoke their rights to audit your CAM reconciliation. The trend is more common when you are dealing with industrial, retail, or corporate tenants.

Therefore, always maintain a comprehensive record of your CAM expenses. You should also comply with the applicable accounting standards for your jurisdiction.

You can boost your reputation and improve tenant retention by staying audit-ready. It also shows you are transparent and don’t intend to take undue advantage of your tenants.

Factor In Your Tenant Occupancy

Are you reconciling your CAM expenses based on 100% occupancy?

This is a common mistake many real estate agencies make. They calculate the CAM costs considering full occupancy.

However, they forget to consider the changes in expenses that occupancy rates can impact.

For example, a tenant should pay for electricity, janitorial services, or water only for the months they occupy your space.

Therefore, you have to account for the number of days a tenant occupies your property. So, if a lease begins in April, the tenant should pay for these expenses for the remaining term.

On the other hand, some expenses don’t change with occupancy. The list may include payments for amenities, security services, and similar expenses.

As a result, consider every CAM expense individually and make your calculation.

Prepare Yourself While There is Time

CAM reconciliations are generally due within 3 – 4 months after the calendar year ends. The time may seem enough to match your books but not so in reality.

Most real estate agencies spend hours shuffling through countless leases. You might also have to pay your employees overtime to complete the workflow within the deadline.

Naturally, such a process opens room for errors and miscalculations.

Therefore, start early and prepare your spreadsheet beforehand. After that, you can start filling in your annual data.

The same applies to any software you use for CAM reconciliation. Set up your software in advance so that you can quickly record your data and get over with your CAM calculations.

This small step can go a long way to simplify your CAM reconciliation, says Colorado Real Estate Journal.

Outsource Your CAM Reconciliation

CAM calculations and reconciliation can become a burden on growing real estate agencies. It demands considerable resources and in-house talents to perform the process efficiently.

Additionally, you cannot take any shortcuts as your reconciliation affects your profitability. You also have to be 100% accurate as you don’t want to overcharge your tenants.

That could take a toll on your brand image and even make occupants leave.

As a result, it can be a strategic decision to outsource your CAM billing and reconciliation. However, you should always work with a reliable partner with due experience in your industry.

Real estate agents and realtors can partner with KriyaGo to outsource CAM responsibilities. We can help you enjoy a hands-off approach to boost your profitability and eliminate irregularities.

Additionally, you can always rely on our expert team for the best results. Get in touch with us now to discuss your requirements.

Final Thoughts

CAM reconciliation should be a well-thought-out process for every real estate agency. You should prepare beforehand and track every change over the year. In addition, calculate occupancy and maintain a single source of truth for accurate calculations. In the end, work with a reputed partner like KriyaGo to outsource your CAM reconciliation to save time and costs.

How Outsourcing Helps With Real Estate Business Growth

Fri, 26 Nov 2021 12:00:09 -0500

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!