Budgeting Guide For Property Managers

Budgeting Guide For Property Managers

A property manager’s budget is simply the break down of the properties income and expenditure over a period. In this article, we will be sharing a budgeting guide for property managers. This article will help property managers set up an efficient budget, that will assist them with their daily tasks.

Firstly, create a list of all expenses and work from there. Some of the usual expenses property managers may encounter include:

  • Security services
  • Garbage Collection
  • Landscaping fees
  • Salaries
  • HVAC System Maintenance
  • Amenity Maintenance (swimming pools, gyms etc)
  • Cleaning services

Rental income is usually the main source that will have to cover these expenses, therefore, make sure you are budgeting with the payments being made by tenants.

Secondly, here is a list of types of budgeting methods you could use:

Traditional Budgeting:

Traditional budgeting is the method of using previous year’s methods to set up the budget. Additionally, most management companies rarely ever change their models, which makes it easier for you to simply implement it.

Zero Based Budgeting:

Secondly, this type of method uses no income as the starting point for the budget. Therefore, this budget method uses the board of directors to come to a decision for each expense, in discussion.

Furthermore, the basic formula used is, the subtraction of the gross operating income from the operation expenses equating to the net operating income. Therefore, the gross operating income is simply the measure of the property’s overall income including tax. On the other hand, operating expenses refers to the costs required to maintain the operations of the property.

In conclusion, once you have mastered the basic formula, use previous records as a guide to budget as efficiently as possible, using the model provided by your employer.

 

 

 

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