A reserve is an amount typically held by a property manager to pay for unexpected expenses to a property during the term of management. Typically the reserve is either paid for by the owner in advance or taken from the first month’s rent prior to the owner distribution (or owner draw).
Rentec Direct supports tracking reserves within the same interface you setup your management fees. To get there, edit a property by right-clicking the property and choosing Edit. Click the Property Menu in the top-right and choose Management Fees. In the section for Property Reserve enter the amount you wish to hold in reserve for this property.
Now when either running a Rental Owner Statement (Reports, Misc) or paying an owner via ACH you will be aware of and can easily account for the property reserve.
To reflect the reserve in the property’s rolling balance, you will want to head to your Accounting Defaults in your Settings tab. You’ll want to enable “Show reserve calculation on the properties and accounts tab?
Enabling this option will cause the application to automatically calculate the property and owners balances and show a secondary figure which subtracts out the reserve.
- For a property, it will simply subtract the reserve from the balance. For an owner, it will add up all the reserves for properties owned by that owner, and subtract the total reserves from their balance.
Because the property reserve calculation is based on the “rolling balance”, it is recommended that you adjust the Accounting Default item #7 (How many months of rolling balance for property summary?) to be 0 (zero.) This setting is found directly above the new setting at Settings, Accounting Defaults.
Of note, when printing a Rental Owner Statement for a property owner the first page will aggregate all property reserves for that owner which makes it easy to at a glance determine any owner distributions due at any time, minus the target reserves. An example report is shown below.