PMs don't create pain for rental owners to get tax and financial info?

[Sean O'Keefe]

I recently spoke to a property management firm that told me their clients don't experience any pain with financials or taxes Jan - April. 

I'm curious,

• Is this PM out of touch with reality OR on how rental property owners, that don't self-manage, feels?
• Do property managers make it easy for you to get financial info and do your taxes?
• No mistakes by PMs on financials that impact taxes? 

I would love to hear some feedback on this from both PMs and rental owners that don't self-manage.

[Drew Sygit]

@Sean O'Keefe how "timely".

Sending owners an Annual Owners Statement with line items that correspond to Schedule E is not difficult. Most PMC softwares allow this - if the PMC knows what they are doing.

It's also just a one-time setup for the PMC!

The most common inquiry we get from our clients is asking for their Annual Owner Statement and/or 1099-MISC. Some clients are asking for these the first week of January! Well, the deadline is the end of January and we typically send by the 3rd week of January. Many of theses inquiries are after we've sent the info already and owners just don't take the time to check their email spam folders or look on their owner portals - where we always post the info. 

@Laura Newton this is the 2nd most common inquiry we get from our clients - because they DO NOT read the email we send them that explains the IRS requirement that a PMC is required to include GROSS amounts collected on behalf of an owner on the 1099-MISC. We even include a link to the IRS article that explains this. 

What's interesting is that many PMCs charge a separate fee to send owners an Annual Owner Statement. Gues this is legal if they are sending monthly statements that an owner (or their tax professional) can piece together.

Regarding mistakes, not aware of any company in the world that is perfect and doesn't make mistakes. Do know that in the last 3 years or so, we've not had to fix a single mistake for a client. We do have our account reconciliations audited by a 3rd party quarterly, which helps catch errors before they impact our clients.

Highly recommend any owner dealing with a PMC discuss with their PMC and their tax professional, or an expert like @Sean O'Keefe, about how to improve processes and communications to make this process smoother:)