HOW OWNER CONTRIBUTIONS FOR MULTI-PROPERTY OWNERS WORK:

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First, let’s say your portfolio has two properties.

One of your properties had a repair last month that exceeded the rental income bringing the property balance down to negative $500.  As a property manager, we never let properties go into the negative, so this is something we want to fix immediately.

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Previously, the cleanest ways to handle this would have been to post offsetting transactions to both property ledgers to show a transfer of funds from one property to cover the loss for the other property — or you the owner send in a check to cover the negative balance. Both options required a fair amount of work.

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Now, there's a new way of showing this "transfer of funds" on your accounting ledger. 

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When Property "A" has a positive balance after all expenses, lets say of "$1,000.00" and Property "B" has a negative balance, of "500.00" then we need to transfer $500 from property "A" to property "B" to cover the negative balance. To make the accounting correct this is how it will show on the account ledger:

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Property A will show a Owner Disbursement of:  $1,000.00 - Owner Disbursement

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Property B will an Owner Contribution of:  $500.00 - Owner Contribution

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The owner will then receive an ACH payment to their bank account of $500 instead of $1,000.

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If your property accounts do not have enough funds to cover negative expenses, you can make an Owner contribution through your owner portal by send a payment to us by credit or checking.

 

If you still have questions about Owner Contributions, please contact us.

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