The Multifamily Real Estate Accounting and Financial System.

1. Standardize Chart of Accounts

• Uniform Account Categories: Create a standard chart of accounts across all properties to make it easier to track income, expenses, and other financial data.

• Property-Specific Codes: Assign each property a unique identifier (e.g., code or number) so you can easily differentiate property-specific data within consolidated reports.

2. Use Centralized Property Management Software

• Consolidated Dashboard: Choose software that supports portfolio-wide reporting, allowing you to monitor KPIs, financials, and occupancy across multiple properties in one view.

• Cloud-Based Access: Ensure remote access for seamless integration and data entry across locations, making it easier to update data and generate reports in real-time.

• Automation Features: Look for software that automates rent collection, vendor payments, and maintenance schedules to maintain consistent financial records.

3. Automate Data Collection and Entry

• Bank Feeds and Integrations: Use software that integrates with your bank accounts to automatically import and categorize transactions for each property.

• Recurring Expense Automation: Set up automated expense tracking for recurring items (e.g., utilities, landscaping) to reduce manual entry and keep data accurate.

4. Monthly Consolidated Reporting Process

 

• Close Periods for Each Property: Standardize a monthly close process for each property, ensuring all income, expenses, and adjustments are accurately recorded by a specific date.

• Roll-Up Summaries: Generate roll-up summaries that combine data from each property, such as income statements, balance sheets, and cash flow statements.

• Variance Analysis: Run variance analyses to compare each property’s performance, identifying areas for improvement or cost savings.

5. Create Key Performance Indicators (KPIs)

 

• Define Portfolio-Wide KPIs: Track metrics like occupancy rate, rent collection rate, operating expense ratio, and net operating income (NOI) across the portfolio to benchmark each property’s performance.

• Property-Level KPIs: Include property-specific KPIs that may affect individual properties, such as unit turnover rate and maintenance costs, to give a more detailed view.

6. Implement Budgeting and Forecasting Tools

• Unified Budgeting Process: Develop annual budgets for each property and consolidate them into a single, overarching budget to monitor how individual properties impact the portfolio’s financial goals.

• Quarterly Forecasting: Regularly update forecasts for each property, adjusting for economic shifts, local market trends, or operational changes to maintain an accurate financial outlook.

7. Centralize Vendor and Payroll Management

• Master Vendor List: Maintain a centralized vendor list to streamline accounts payable and avoid duplicate payments or inconsistent billing across properties.

• Centralized Payroll for Staff: If you employ staff across properties, consider consolidating payroll services to reduce costs and simplify reporting.

8. Regular Financial Review Meetings

• Quarterly Portfolio Reviews: Conduct quarterly reviews with your team to discuss portfolio performance, operational issues, and strategies for each property.

• Review Financial Trends: Use these meetings to examine trends, assess the impact of market changes, and identify growth opportunities across properties.

9. Engage a Consolidation Expert or CPA

 

• Hire Real Estate Accounting Experts: Work with a CPA or accounting firm specializing in real estate to assist in setting up and optimizing financial reporting systems.

• Audit for Accuracy: Periodically audit consolidated reports to ensure accuracy and compliance, and implement best practices in your reporting process.

By following these steps, you’ll streamline financial reporting, gain valuable insights, and be able to make more informed decisions across your portfolio.

Sent from my iPhone

Below is a Standardized Chart of Accounts for three multifamily properties, incorporating uniform account categories and property-specific codes for consolidated reporting.

Chart of Accounts Structure

The chart is broken down into Income, Operating Expenses, Non-Operating Expenses, and Capital Expenditures. Each account is assigned a 4-digit Account Code and a Property Identifier (P1, P2, P3) for the three properties.

1. Income Accounts

Account Code	Description	Property 1 (P1)	Property 2 (P2)	Property 3 (P3)
4000	Rental Income	P1-4000	P2-4000	P3-4000
4010	Vacancy Loss	P1-4010	P2-4010	P3-4010
4020	Other Income (Laundry, Parking, etc.)	P1-4020	P2-4020	P3-4020
4030	Concessions/Discounts	P1-4030	P2-4030	P3-4030
4040	Late Fees	P1-4040	P2-4040	P3-4040

 

2. Operating Expenses

a.        Administrative Expenses

 

Account Code	Description	Property 1 (P1)	Property 2 (P2)	Property 3 (P3)
5000	Property Management Fees	P1-5000	P2-5000	P3-5000
5010	Office Supplies	P1-5010	P2-5010	P3-5010
5020	Legal & Professional Fees	P1-5020	P2-5020	P3-5020
5030	Advertising & Marketing	P1-5030	P2-5030	P3-5030

b.       Maintenance and Repairs

Account Code	Description	Property 1 (P1)	Property 2 (P2)	Property 3 (P3)
5100	General Maintenance	P1-5100	P2-5100	P3-5100
5110	HVAC Repairs	P1-5110	P2-5110	P3-5110
5120	Plumbing	P1-5120	P2-5120	P3-5120
5130	Landscaping	P1-5130	P2-5130	P3-5130
5140	Pest Control	P1-5140	P2-5140	P3-5140

c.        Utilities

Account Code	Description	Property 1 (P1)	Property 2 (P2)	Property 3 (P3)
5200	Water & Sewer	P1-5200	P2-5200	P3-5200
5210	Electricity	P1-5210	P2-5210	P3-5210
5220	Gas	P1-5220	P2-5220	P3-5220

d.       Payroll & Contract Services

Account Code	Description	Property 1 (P1)	Property 2 (P2)	Property 3 (P3)
5300	Salaries	P1-5300	P2-5300	P3-5300
5310	Contracted Maintenance	P1-5310	P2-5310	P3-5310
5320	Security Services	P1-5320	P2-5320	P3-5320

3. Non-Operating Expenses

Account Code	Description	Property 1 (P1)	Property 2 (P2)	Property 3 (P3)
6000	Mortgage Interest Expense	P1-6000	P2-6000	P3-6000
6010	Property Taxes	P1-6010	P2-6010	P3-6010
6020	Insurance	P1-6020	P2-6020	P3-6020

4. Capital Expenditures

Account Code	Description	Property 1 (P1)	Property 2 (P2)	Property 3 (P3)
7000	Building Improvements	P1-7000	P2-7000	P3-7000
7010	Major Equipment Replacement	P1-7010	P2-7010	P3-7010
7020	Tenant Improvements	P1-7020	P2-7020	P3-7020

5. Summary

By using property-specific codes like P1, P2, and P3 along with standardized account categories, you can efficiently manage and consolidate financial data across multiple properties. For example, "Rental Income" will be tracked under the same account (4000) across all properties, but will have specific entries for each (P1-4000, P2-4000, P3-4000) to easily identify the source property.

Notes:

We are currently in conversations with

Andrew Burrell

Sales Consultant | [Buildium](https://www.buildium.com/) | [Propertyware](https://www.propertyware.com/)

[Book a Meeting with Me](https://app.leandata.com/l/fjK84Z4/buildiumdiscussion "https://app.leandata.com/l/fjK84Z4/buildiumdiscussion")

53 State Street #3802, Boston, MA 02109

Direct:  617-936-7120