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Salt Lake City Bookkeeping Blog

Real Estate Investment Bookkeeping

Posted by Derick Beauregard on Mar 25, 2013 7:32:00 AM

On the face of it, assessing the state of a real estate investment is easy. It boils down to one question; do rents cover expenses and debt service with a little extra cash left over to make it worth your while? However, whether the answer to this question is "yes" or "no", it takes more to analyze your investment and make adjustments to maximize the value. As you may have guessed it all starts with sound and detailed bookkeeping. Let's start with the revenue side. It's not enough to know your net revenue; you need a breakdown of how that is derived. There are four major components to this number that can tell you a lot about how you stack up to your competition: Gross Potential Rent, Vacancy, Concessions, and Bad Debt. This will help you to determine your Economic Occupancy, the real measure of your performance in the rental market. Let's take a closer look.

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Topics: Outsourced Bookkeeping, Business Budgeting, Real Estate Bookkeeping, Property Management, Financial Reports