Managing & Reporting Property Reserves

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 (owner contribution) or taken from the rental income prior to the owner distribution (or owner draw, owner disbursement).

If the reserve amount is paid for by the owner in advance, you'll want to post the amount received from the owner to the property as an owner contribution. 

More information on owner contributions can be found here: Owner Contributions

The other option is to hold some back from the rental income instead of paying out full owner disbursements. In either case, the software can keep track of any funds you are holding in reserve. 

Holding a Property Reserve

The Rentec Direct software supports holding reserves at the property level. You can either enable and add the reserve dollar amount when you first add a property or using the following instructions. 

In your Rentec Direct account: 

  1. Click Properties
  2. Right-click a Property and choose Edit Property 
  3. Under Financials, check the Property Reserve checkbox and enter the dollar amount to hold. 
    Enable Property Reserves
  4. Click Save Change when finished. 

Now when either running an Owner Statement report or paying an owner disbursement, you will be aware of and can easily account for the property reserve. 

Displaying a Property Reserve

You have the option to configure your settings to reflect the reserve in the property's rolling balance to see that information at a glance when viewing your properties list. 

In your Rentec Direct account:

  1. Click Settings
  2. Choose Accounting Defaults
  3. Choose YES for Show reserve calculation on the properties and accounts tab? 

    Show property reserve setting
  4. Click Save Changes to enable. 

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.

How to Release a Reserve

If you no longer need to hold funds aside for emergencies and wish to release the reserve back to the Owner, follow the instructions below. 

In your Rentec Direct account: 

  1. Click Properties
  2. Right-click on the property and choose Edit Property 
  3. Uncheck Property Reserve
  4. Click Update Property 

From there, the funds will no longer be held by the property and are available to pay out to the owner. 

More information about paying out owner disbursements can be found here: Pay Owner Disbursements

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