Keep An Inventory For Your Rental Property For Effective Real Estate Management

An inventory for a commercial property refers to the detailed documentation of all the fixed and moveable contents within the premise of the property. The document consists of a list of all durable and non-durable items in the property, along with their date of purchase, value at the time of purchase, condition at the time of preparation of the document and the rate of appreciation or depreciation of every item.

An inventory is a very important document for sound real estate property management, as it provides an overview of the net worth of the property and helps communicating the details of the property to the tenants. Here are five reasons why property managers should maintain an inventory for commercial properties.

1. An inventory helps in property appraisal

A real estate appraisal by a licensed appraiser is extremely important for the correct valuation of any property. Although the appraisers basically use their own sources and techniques to determine the real value of a property, they often demand to see the inventory of the property. The information from a well-maintained inventory is helpful for ascertaining the value of the property, benefitting the property owner.

2. An inventory maintains transparency between landlord and tenant

At the beginning of every tenancy, a discussion held between the property owner and the tenant regarding the inventory builds a sense of trust between them, a much needed aspect of good real estate management services . The tenant is allowed to check whether the condition of every item within the premise is in accordance to the inventory, and the landlord is convinced of the tenant’s acknowledgement of the inventory.

3. An inventory informs you when renovation and replenishment are needed

The dates of purchases and subsequent repairs of items as detailed in the inventory provide an approximate overview of the need of renovation or replenishment of the items according to their durability. Such timely actions help in preventing unwanted damages. Good property management services like Madison Property Management also maintain a column for tentative renovation and replenishment dates for the items in the inventory.

1. An inventory provides information to solve disputes
2. If the landlord and the tenant fall out over the liability of any damage, the inventory plays a very useful role in conflict management by providing relevant information about the damaged item, thereby eliminating any possibility of unjust claims.
3. An inventory helps in tax reduction due to depreciation
4. The property owner enjoys tax benefits owing to the regular depreciation of property. This benefit can be maximized by adding up the depreciation expenses of all the items within the property.

I am John Daniel, A US based Real Estate Professional and Blogger. With experience in real estate of more than 10 years, the above mentioned article is solely based on my experiences with madison management .