ShortCourses

Budgeting & Accounting 101

This ShortCourse will help you master the language of budgeting and accounting and learn how to apply these principles in your daily operations. Understanding the cash, accrual, and modified accrual (hybrid) accounting methods allows you to make well-informed business decisions that balance the needs of the property, building occupants, and market forces – and enhance the asset value. In addition to learning about reporting mechanisms, GAAP standards and cost controls, you’ll master concepts like assets, liabilities, owner’s equity, and other fundamental accounting principles so you can continue to grow your career in the commercial real estate industry.

Creating CAM Reconciliations

Common Area Maintenance (CAM) expenses need to be calculated and measured against tenant payments each year. After CAM is calculated, the amount due is compared with the amount collected to see if tenants have over- or under-paid. This process is called CAM Reconciliation, and this ShortCourse provides an introduction and practice activities to perform the basic CAM Reconciliation process.

Identifying Income Sources

Property and facilities managers need to understand different rent clauses and how they apply to each property they oversee. They must also know how to divide building operating costs among tenants based on lease types, calculate additional charges, and fairly distribute expenses. These charges may be adjusted using factors like inflation (CPI) or a percentage of rent. It’s essential to clearly explain these costs to tenants, especially those unfamiliar with them, requiring strong communication and diplomacy skills. This course will help you understand all of these moving parts and how to effectively communicate with tenants about costs as you go.

Measuring Property Performance

Having already learned how to identify sources of real estate income and expense, you can now learn how to gauge the performance of your property based on net operating income and expenditure levels. You’ll also learn about the importance of capital expenditures, rationale for such expenditures, and how a chargeback system—one designed with commercial comparability in mind—can help facility managers fairly allocate facilities costs to their end users.

Recording Revenue

In this course, you’ll learn how to properly record and manage all the types of revenue for your property, which includes billing tenants, collecting payments, and reporting finances. Charges fall into three categories: base rent, additional rent (e.g., taxes, maintenance, CPI increases), and miscellaneous fees (e.g., repairs, utilities). Property management may also offer incentives like free rent or stepped increases. Payments can be made via electronic transfer, credit card, lockbox, or in person, as outlined in the lease. You’ll learn how to track collections, enforce payment policies, and set deadlines.