There are many reasons why multifamily owners choose to vertically integrate by starting a property management firm to manage their properties. From having increased control to increasing NOI property management has various benefits for owner operators.

With all the benefits it may seem like a no brainer to bring management in house. Ascent Multifamily Accounting helps dozens of multifamily owners each year as they take over management and we have found that while vertical integration has many benefits there are times when it does not work for and an owner or ownership group.

Why Self-Management May Not be For You

After years of seeing multifamily owners bring management in house Ascent has seen several key reasons why self-management is not a good fit.

1.        Time-Consuming and Overwhelming Workload

Managing a multifamily property isn’t just about collecting rent. Owners must handle financial statements, tax filings, payroll for staff, tenant billing, budgeting, and more. Over time, the administrative workload can consume hours of an owner’s day, especially when managing multiple properties. Property owners, especially those who don’t have an accounting background, often find themselves overwhelmed trying to juggle both the physical and financial aspects of the business.

2.        Increased Risk of Financial Errors

With self-management, there’s always a higher risk of making mistakes. Incorrect bookkeeping, mismanagement of funds, missed deadlines for tax filings, or mistakes in tenant billing can lead to severe financial consequences. Property owners might not have the expertise to identify subtle errors until it's too late—potentially leading to fines or penalties.

Ascent helps owners avoid these mistakes by acting as a back-office partner, reconciling property books, bank accounts, and putting together institutional quality financials for both owners and their investors. Ascent team of bookkeeper has expertise in the major property management software’s including RealPage, Yardi, ResMan, Entrata, and AppFolio.

3.        Property Location and Concentration.

Owners who have properties that are too far apart often have challenges being able to oversee all of them property. This is especially true for smaller properties (under 100 units) and when there is only one or two properties in a location. If you have five properties but they are each in a different state, you may spend all your time and resources traveling. This inevitably leads to burn out.

4.        Small Properties

A general rule of thumb in property management is that for every 100 units on a property you need one leasing staff/property manager and one maintenance tech. Without scale and a well thought out strategy for staffing solutions, properties with less than 100 units are challenging to manage and struggle to cash flow.

5.        Chasing the Next Deal

If you are an owner who is a deal junkie and love to chase the next deal self-management may not be for you. Management takes times and energy and if you want to be spending that time buying new deals your properties will often be neglected and start to suffer.

The Benefits of Outsourced Accounting

If you are still determined to self-manage outsourcing some of the back-office responsibilities such as the bookkeeping can alleviate many of the burdens that come with self-management. By partnering with Ascent, property owners can:

• Access Real-Time Financial Information: Stay updated with instant financial insights, enabling timely decision-making.
• Reduce Overhead Costs: Efficient accounting processes can lead to significant cost savings.
• Ensure Business Continuity: Reliable support minimizes disruptions, ensuring smooth operations.
• Optimize Financial Workflows: Streamline processes for greater efficiency. Letting you focus on front facing operations.

By outsourcing, property owners gain access to a team of experienced professionals who can handle the complexities of multifamily property bookkeeping, so they can focus on managing their properties and growing their portfolio.

Conclusion

While self-management may work for some, many property owners find that it is not a good fit for them. Outsourcing accounting services can allow many owners to focus on enhancing property performance and scaling their business enabling them to vertically integrate with less of the headache. Partnering with experts ensures your financial operations are handled with the expertise and attention they deserve.

At Ascent we are committed to helping owners and 3^rd party management firm thrive. So, we encourage owners to think about their goals and take time to evaluate if they are willing to put the time and energy needed to help their properties succeed

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