Hey there, real estate investors! So, my partner is currently handling all our rental property bookkeeping, from long-term to short-term rentals. We rely on professional property management companies, but she’s hesitant to outsource the bookkeeping because she’s worried about fixing more mistakes than if she does it herself. The deal is, she spots errors in the property management statements like duplicate repair charges or tenant deposit issues. For instance, when we switched property management companies, the prior one scheduled pest control for a property, and then the new one did the same without knowing. After digging into it, she found out the delay in the maintenance request caused the confusion.
We often hire our own vendors instead of going through the property management company, which a bookkeeper might not pick up on. Her take is, if she has to explain every little thing and still correct errors, she might as well handle the books herself, especially since she meticulously attaches receipts to each transaction. On my end, I’d rather have her focus on more valuable tasks in the business rather than getting bogged down by data entry and reconciliations. Most investors I know just forward the property management statements to their bookkeeper without a thorough check. But that seems risky given the potential for errors and the already tight profit margins in this industry.
So, here are my burning questions: How do you ensure accuracy when outsourcing bookkeeping, especially when the property management statements aren’t foolproof? What tools, systems, or procedures do you use to avoid micromanaging your bookkeeper constantly? And how do you communicate unique property transactions without it becoming a bigger hassle than doing it yourself? I’m eager to learn how you strike the right balance in this scenario.