Key Takeaways
- Maintain two reserves: operating (3–6 months of expenses) and capital (funded monthly based on system replacement schedules).
- The expense ratio benchmark for residential properties is 35–50%; ratios above 50% signal cost control problems.
- Monthly reconciliation verifies rent receipts, expense disbursements, trust balances, and bank statement alignment.
- Annual audits of PM trust accounts are recommended for investors using professional management.
This track contains subscriber-only lessons
Explore free tracks in this area of study, or subscribe for full access.
Browse available tracks"Financial Controls, Legal Compliance & PM Evaluation" is a Pro track
Upgrade to access all lessons in this track and the entire curriculum.
Test Your Knowledge
1.What is the recommended reserve fund target for a residential rental property?
2.How frequently should trust account reconciliation be performed?
3.What annual maintenance cost per unit is typical for single-family rentals, used for expense benchmarking?