Real Estate

In accounting it is most commonly tied to raw land, some companies will include the structures and other improvements on the land in the total value accumulated.

Occupancy Rate – How to Evaluate

In the real estate sector lies the temporary housing industry.   Temporary housing includes hotels, motels, resorts, apartment complexes and rental homes.   The number one tool to measure performance is occupancy rate.   This is the number of nights the facility is occupied against total available nights.   Each of the different forms of temporary housing have minimum …

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Replacement Reserves- Understanding the Fundamentals

Long term and short term housing rental businesses use a financial operations tool to maintain, repair and upgrade the physical facilities.  This tool is known as replacement reserves in the real estate industry.  In almost all cases it is a contractual agreement requirement between the mortgage lender and the borrower.  The financial arrangement between the …

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Apartment Complex Profit and Loss Statement – (Revenue Section) Best Presentation Format

In the apartment complex industry I have had the privilege of reviewing four different presentation formats prepared by different Certified Public Accounting Firms.  Interestingly enough, they were all distinctly different.  But one stood out!  It made much more sense than the others.  One of the other three had an interesting subsection and so I combined …

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Real Estate Syndication

Have you ever wondered how apartment or office complexes are financed?  A typical complex will have 80 to 100 units and the cost of construction will approximate $7,000,000.  So where does this money come from?  Your average person will think it is financed by a mortgage of some sort.   Well, this is partially true, but …

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Syndication refers to a group of individuals or business entities working together to achieve a set goal(s).  In business, the goals vary.  The most common goal is to acquire capital and use the combined power of the group in exercising that capital for a better than average rate of return.  This gets back to a …

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The Fixed Assets Section of the Balance Sheet

The fixed assets section of the balance sheet is one of the easiest sections to read and understand.  This article is written to describe and illustrate some simple examples of the fixed assets section.  I am not teaching the reader about the accounting system(s) used for fixed assets or how to calculate depreciation.  This article …

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