When you’re busy growing your commercial real estate investments, it’s easy to get caught up in the details. Our commercial property financial audit services help you see the big picture. During this financial analysis process, our commercial real estate experts compare your investments and expenses to similar properties within your market, identifying opportunities for saving money and increasing your net operating income.
Our commercial property financial audit is all about calculating your net operating income to make sure you’re in a good financial position in comparison to overall market expectations. We can help you make sure you are spending your money wisely and reinvesting appropriately in your property. We will also identify areas you could be reducing expenses.
When you partner with The Katalyst Team for a commercial property financial audit, we’ll help you calculate your net operating income by subtracting your operating expenses from your gross income. Our audit process is thorough, ensuring accurate results and actionable outcomes.
Your gross income is the sum of all earnings from your property. This includes:
Rental income likely makes up the largest portion of your gross income. Our team will compare your rental costs to other similar units in your market, making sure your rent is competitive and your property is profitable.
If you have coin laundry onsite, you need to include revenue from the laundry room(s) in your gross income calculations.
If your tenants pay extra for storage spaces or garages, include these payments in your gross income calculations.
A Katalyst Team commercial property financial audit includes expense analysis. After totalling your gross income, we’ll record a list of your expenses. This includes:
If you hire a person or a team of people to manage your property on your behalf, their wages need to be included in your calculations.
Your rental property mortgage is likely to be your largest commercial real estate expenses. Consider the cost of your monthly mortgage payment as well as the overall balance of your loan.
Tax responsibilities for rental property owners are important but not overly complicated. Our financial audit for property management will help you understand how your taxes impact your financial position.
Your utilities expense will vary depending on whether you require your tenants to pay for their own utilities. If you advertise rentals with utilities included, you need to consider the full cost of electricity, water, sewer, garbage and gas services.
An operating expense is anything that has to do with the day-to-day operation of a rental property. Other operating expenses may include HOA fees, small maintenance tasks, insurance costs, lawn care and snow removal.
Unlike operating expenses, capital expenses are costs associated with buying or maintaining fixed assets. Capital expenses are generally larger investments such as large renovations and remodeling, appliance upgrades, new carpet, a new roof or other big purchases designed to increase property value.
If you’re looking for support to figure out how to analyze rental property expenses, connect with the Katalyst Team. Our experienced real estate investment experts can help you save money and reach your goals. Reach out to learn more!