UNDERSTANDING OWNER STATEMENTS
I have questions about my monthly statement, how do I get my questions answered?
You can contact us by email or call us Monday through Friday 8 am till 5 pm EDT.
Sometimes a tenant pre-pays all or a portion of the next month's rent before it is due. The rent charge is not entered or due until the first of each month. That pre-payment then is held in trust for the tenant until the month it is due. This shows on the owner's statement in the "Pre-paid rent held until Due" line item indicating that funds for the next month have been received. On the statement for the period that it is not yet due, it will show as a positive number in the current and YTD columns. On the statement for the month that the payment is applied, it will show as a negative amount in the current column of the Pre-paid rent held until due line item showing that it is being removed from the trust account. It is at the same time reflected in the rental income as a positive number although this may not always be obvious if the tenant has made an additional payment in the same month.
Bad Debt in General?
When an account is turned over to the collection company, they aggressively pursue the debtor to find and re-coup all that is possible. They do charge a commission to do this which is taken out of what they collect and then they forward the balance to Allegiant. We apply this amount to the former tenant's account for disbursement. Once the collection company has collected as much as possible, the remaining uncollected balance on the tenant's account is charged to Bad Debt to clear out the tenant's account and recognize that no additional funds will be collected on that account.
Bad Debt on the Owner Statement?
When the transaction to recognize the Bad Debt is entered on the tenant's side, there is a corresponding entry automatically entered on the owner's statement to show that this is debt that will never be recovered. On the owner's statement, this is a balancing entry that does not change the bottom line (net income) on the statement. What the entry does is to move the item that cannot be collected from whatever category it was originally (i.e., water and sewer, gas and propane, etc.) in to the category of Bad Debt. This is something that an owner's accountant will review and address when the owner's tax return is completed.
Why does my beginning balance not match my last statement?
Unless otherwise requested, we email statements as soon as we process payments to you, the owner. Usually this takes place in the first half of the month. We continue to manage your property all month so sometimes there will be activity that takes place after you receive your initial statement that will change your ending balance. We make every attempt to keep these transactions to a minimum but are not always able to eliminate them altogether.
What types of transactions cause my beginning balance to change?
The most common transactions are:
A utility bill received after proceeds were paid out that is due prior to the following month.
A tenant move-out that takes place after proceeds were paid out.
A tenant payment that has been returned NSF by the bank.