A new update to your Rentec Direct property management software now provides a streamlined system for providing owner contributions to properties with a negative balance as you process your standard owner distributions.
You will have the option to automatically bring a property to a positive balance with an owner contribution as you process owner disbursements.
This feature was first released to the Rentec Insiders (our beta testing group) a few months ago and the feedback from property managers has been immensely positive. We are pleased to hear that this new feature saves a ton of time when paying owners with multi-properties. And now the update is available to all Rentec Direct property managers!
We’ll walk through the process of just how this feature works below, and why you are going to absolutely love it!
Owner Contributions for Multi-Property Owners
First, let’s say you are managing the portfolio for Mr. John Smith and he has two properties.
One of Mr. Smith’s properties (411 4th St) had a massive repair last month that not only exceeded the rental income but dwindled the reserve, bringing the property balance down to negative $100. As a property manager, we never let properties go into the negative, so this is something we want to fix immediately.
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 have the owner send in a check. Both options required a fair amount of work.
Now, with the updated owner distribution wizard, it couldn’t be easier!
When sending Mr. Smith his distribution, simply enter a negative value into the property that needs funding. This then modifies the outgoing payment to the owner automatically and posts the appropriate entries on the property ledgers. [ Note: within this tool positive values = owner distributions and negative values = owner contributions ].
So for example, using our scenario above, we want to bring 411 4th St back to a positive balance of $250 to meet the property reserve requirement. To do that, we post -350.00 on the property line.
The owner will then receive an ACH payment of $4,147 instead of $4,497. And entries are now automatically added to the property ledgers and reports:
7/23/2020 ACH 123 Rocket Place: $4,497 Owner Distribution
7/23/2020 ACH 411 4th St: $350 Owner Contribution
This works with any kind of disbursement: check, print check, or ACH.
New updates to the Pay Owners feature of your Rentec Direct account allow you to easily move a negative property balance into the positive while completing your owner distributions.
Important Settings Update to the New Owner Disbursement Wizard
It’s important before you begin using this new enhancement to head over to the Settings tab and choose Accounting Defaults and set a ‘Default owner contribution category‘. That category will be used for categorizing these contributions.
Owner Contributions and Owner Distributions
To learn more about Owner Contributions or Owner Disbursements with the Rentec Direct Pay Owner Wizard visit these helpful articles in the Knowledge Base.