Image: rpmmidwest.com
Property management accounting is complex, whether it be short-term co-hosting or long-term trust accounting. Keeping everything property tracked is vital for not only operating the business but ensuring funds are properly distributed to owners. Rent comes in, expenses go out, and in the middle sits the responsibility of maintaining clean records, these accounting systems need to be setup properly from the start.
Trust accounting is the traditional structure used for many long-term rental management businesses. In this model, rent is collected into a separate trust account that legally holds funds on behalf of property owners. The property manager acts as the fiduciary of those funds and is responsible for keeping proper accounting. There are many regulations and compliance requirements for trust accounting firms.
Co-host accounting is common in short-term rental management. Co-hosting works differently in that rents flow directly into the owners account and the manager receives a share or percentage for managing the property. This shifts the accounting focus from holding funds to tracking commissions, expenses, and payouts between owners and managers. This model simplifies certain aspects of cash handling, but still requires strong bookkeeping practices to ensure accurate reporting and transparency to those involved.
Have you tried co-hosting?
Interesting articles related to this topic:
- Co-Hosting vs Property Management: What’s the Best Way to Grow Your STR Business? | Keystone Bookkeepers
- What you didn’t know about property management trust accounting – Buildium
Thank you for taking the time to view our blog.
Partners Group LTD 
Leave a comment