With just over a quarter of 2017 left in the books, many multifamily property owners and managers are budgeting for 2018 and looking for new ways to propel their businesses forward. Many are finding that outsourcing their accounting can provide multiple benefits—from easing the headache of managing the back office to direct cost savings.
Mark Weinstein, founder, and president of MJW Investments in Los Angeles, recently began outsourcing the accounting for his portfolio. MJW Investments is one of the largest private owners of student housing in the nation and owns a $600 million portfolio of apartments in Los Angeles and the San Fernando Valley.
“We were constantly frustrated with our accounting as it related to property management,” he said. “We would get very immersed in the stuff and it took up a lot of our time.” Weinstein began hearing about outsourced accounting as a best practice in the multifamily industry and started researching it.
“I reached out to friends and asked them if they outsourced and who they outsourced a to…a lot of them were going to accounting firms,” he said. “It wasn’t very efficient or cost-effective,” Weinstein said he found Ascent, which specializes in accounting for the multifamily industry, his best option. “I felt that with their structure, it could be cost-effective and we could benefit greatly from it.”
Roland Stewart, chairman, and CEO of Paramount Investments in Texas found a similar challenge with his properties. “I don’t believe accounting and Human Resources functions are profit centers in this industry,” he said. “And with 1,500 units I don’t have what I see as a critical mass to have a full-time team in-house. By outsourcing these functions, we are more efficient and have more time to focus on revenues rather than operations.”
A key benefit to outsourcing his back office has been letting the accounting firm manage both the technology and employees required to function at peak efficiency for his company. “They focus on that part of the business better than we ever could,” he said. “They handle training, seminars, and insurance in addition to the accounting. And with the accounting, they spend the time and money to stay on the cutting edge of trends and technology.” Stewart said he was able to reduce staff and increase his efficiency immediately after he began outsourcing his accounting to Ascent.
MJW Investments also found immediate benefits to outsourcing, including the elimination of a full-time accounting employee and streamlining of its apartment portfolio’s processes. “Our portfolio in Los Angeles isn’t as big as our student housing, but it (outsourcing) had a huge impact on reducing staff and also simplified what we do. Now I think we can focus on other things that are more profitable for us.”
Weinstein said he is now apt to pursue new acquisitions now that he doesn’t have to worry about the back office for his portfolio. “Ascent is very good for us from an aggravation level and the ability to get things done quicker. It has had a big impact on our overall ability to focus on our core business, which is buying properties and rehabilitating them rather than being tied up in the accounting.”
When it comes to streamlining processes and advancing the industry, both Weinstein and Stewart see social media marketing as an emerging issue that needs to be streamlined. “Lead generation is for future prospects is key to our future and something we need to get more involved with,” said Weinstein. “How we attract potential renters, whether for regular apartments or student housing, is a big technological need in the industry.”
Stewart echoed the sentiment. “New techniques and programs to utilize social media will be a major influence on how we will grow as an industry,” he said.
“Technological advances are at the forefront when it comes to succeeding in the multifamily industry, whether it be forward facing with marketing and sales or in-house with the accounting functions,” said Scott Seegmiller, CEO of Ascent Multifamily Accounting. “There have been great strides in technology for the back office and more and more owners and managers are utilizing it for their benefits.”
For both outsourced accounting and other emerging business processes to streamline the multifamily industry, technology is a key indicator of success. The team at Ascent is well versed in the most popular platforms for multifamily accounting, including RealPage, Yardi, ResMan, Propertyware, and Entrata. Seegmiller also works directly with software companies to develop new functions and features for their multifamily clients. “Our knowledge of industry software makes the transition from in-house to outsourced accounting platforms virtually seamless,” he said. An industry expert, Seegmiller is often cited as a source in reviews for new and currently available multifamily accounting software.
Many of Ascent’s clients work with the firm’s management consulting division to streamline their operations. Mike Ballard leads the firm’s consulting and tax credit practices to help owners save additional money in their operational budget and through both New Markets Tax Credits and the Section 45L tax credit program.
For more information on Ascent Multifamily Accounting and its services, visit www.multifamilyaccounting.com or call 702-998-5030.