A reserve is an amount typically held by a property manager to pay
for unexpected expenses to a property during the term of management.
Typically the reserve is either paid for by the owner in advance or taken from the first month's rent prior to the owner distribution (or owner draw).
If the reserve amount is paid for by the owner in advance, then your first step is to post the reserve amount that you've received from the owner to the property as an owner contribution.
Rentec Direct supports tracking reserves within the Add Property option. You can also set a reserve on an existing property by going to Properties tab > right-click on Property > select Edit Property.
Now when either running an Owner Statement (Reports, Misc) or paying an owner via ACH you will be aware of and can easily account for the property reserve.
** NOTES & TIPS:
To reflect the reserve in the property's rolling balance, you will want to head to your Accounting Defaults in your Settings tab. You'll want to enable "Show reserve calculation on the properties and accounts tab?
Enabling this option will cause the application to automatically calculate the property and owners balances and show a secondary figure which subtracts out the reserve.
- For a property, it will simply subtract the reserve from the balance. For an owner, it will add up all the reserves for properties owned by that owner, and subtract the total reserves from their balance.
Because the property reserve calculation is based on the “rolling balance”, it is recommended that you adjust the Accounting Default item #7 (How many months of rolling balance for property summary?) to be 0 (zero.) This setting is found directly above the new setting at Settings, Accounting Defaults.