Let us figure out the pros and cons of accrual accounting to help you choose which one is better for your business.  

Pros 

• Creates a more accurate financial report for the company - helps you understand the customer buying and spending patterns. 

• All GAAP guidelines are followed when you do accrual accounting. 

• If you start using accrual accounting from the start of your business, you will never have to change the process, even if you scale up your business process. 

Cons 

• Requires a lot of resources and in-depth accounting knowledge. You will also need expert accounting help to smoothen the process. 

• The biggest fault of this system is that it can give you an unclear picture of your cash in hand, which can be a financial disruption for a small business. 

What are the pros and cons of cash basis accounting? Check them out. 

Pros 

• The process is very simple, and small businesses can figure it out in a shorter period. Hence it also uses less number of resources to function and saves money. 

• Helps in tax payments too. Say you pay your taxes in April, and a work that was done in April but the payment came in June does not have to be filed in the same financial year. You can easily file this income in the next tax bracket.  

Cons 

• Not a holistic financial picture because it does not record business transactions when it happens but only when payments come through. No payments in the pipeline can be figured out from this system. 

• The cash basis system keeps no records of the Accounts Payable and Accounts Receivable systems. It can become a problem to retrieve and track payments if you do not have the actual dates of payments.  

• If by any chance your business exceeds the $25 million mark, you will be again required to shift to the GAAP guideline-based system and revamp your whole business process overview.  

Multiple factors are pushing the real estate industry into making their buildings more energy-efficient. Here are the most important ones that you need to pay attention to.

• Pressure from real estate investors 

Deloitte reports on the Sustainability Accounting Standards Board agreements state that environmental, social, and governance (ESG) factors are major driving factors in present real estate investments. More and more investors want to align their real estate portfolio according to environmental standards and do their part in helping sustainability. According to Climate Action 100+, more than 500 global investors insist that companies make net-zero strategies and pledge for a better tomorrow.  

• The millennial homebuyers 

Millennial homebuyers are now driving the majority of the real estate market, and they care about sustainability more than the previous generations, and builders are taking it seriously. According to the Architect Magazine reports, about 15% of real estate developers have started using high-performing home appliances to appeal to the millennial crowd and drive sales.  

• Governmental policies 

• Having energy-efficient buildings will bring down the average operating costs of the buildings. 

• Your electricity bills will go down subsequently both inside your homes and in the common areas of your buildings. 

• It will also make your living habitat more eco-friendly, to begin with. 

• Rethinking new construction  

New real estate and building construction can rethink how they imagine a business. There are many different initiatives in the USA to construct green buildings and eco-friendly communities in order to help the environment. From using sustainable materials for construction to tracking the energy levels of the project to help make projects more eco-friendly. Even the use of the latest selection of technology in project management can help in reducing the carbon footprint. Home tours, tenant onboarding, property management, and such things can be conducted virtually without constantly visiting the sites.  

• Renovating old constructions 

Old buildings are significant energy-draining assets due to multiple factors like old appliances and non-sustainable construction materials. Existing real estate can be renovated according to new energy standards to help sustainability.  

• Energy star appliances 

Real estate owners and property managers can start using Energy Star appliances in their homes to get energy-efficient buildings and also attract new-age customers. This will help save a lot of money and also help the environment along the way.  

• Periodic energy audits  

Excess energy drainage is never visible to the naked human eye; it is essential to conduct energy audits to determine which portions of your buildings are causing major energy loss. Professional energy auditors can put up drones with thermal cameras to get the job done and get you credible reports on it.  

• Go digital with construction management 

Due to digital advancement in the real estate world, there is a lot of new technology to digitize all kinds of work in the industry, including construction management. You can remotely monitor the construction of your buildings and save fuel on travel. A construction management software like Procore will also help you keep up with all energy efficiency standards and track their progress based on pre-set guidelines.  

• MRI software - Property and investment management 

• Yardi software - Property and asset management 

• Procore software - Construction management 

• MiCasa software - Asset and property management 

Property management has different challenges at every phase. Here we discuss the top 10 challenges and use various Yardi software features to mitigate and manage them seamlessly. Check them out.  

1. Keeping up with compliances 

Your business can be headed for a downward slope and can be ruined faster than ever if you do not keep up with different governmental and legal compliances. You need to keep track of many accounting compliances, health guidelines, and local and federal laws when you run a real estate business. If you fall behind on any of them, you can be up for many penalties and legal battles. Yardi can easily automate this process by keeping track of your compliance conditions and will send you automated notifications if you are behind on any deadlines.  

2. Keeping track of credible customer leads 

Using excel sheets or depending on your memory to keep track of customer leads is a major pitfall for your business. A lot of data can be lost and misinterpreted on the way. Yardi can make you an automated system that can segregate your leads into categories and give you an analytical report based on the priority and credibility of these leads.  

3. Back office accounting and financial management 

Without the rightly skilled staff, your real estate’s financial health can go for a toss. But sometimes, hiring an in-house accounting and financial team can be a significant monetary burden. Automating this process with project management software like Yardi is the best way. They will compile all your accounting data, analyse them, keep up with compliances and help close all your books right on time to file all taxes.  

4. Automated property management - happy tenants 

From collecting rent to asset management, the real estate business has a lot of tasks that come under property management. Putting all of this responsibility on one human can lead to a lot of trouble. You can play it smart and integrate software like Yardi to automate this process and streamline all the property management tasks. You will never have to set foot in the properties, yet all this work will get done without any extra hassle for your team.  

5. Quick responsiveness to customer needs 

Making your customers wait before they get a response to their queries and issues can be fatal for your business. You can face a lot of loss of business and tenant turnover if you keep them waiting. Automating the communication process with Yardi can be an excellent fix for this. Your customers can raise issues on the Yardi dashboard, and you can address them on the go and resolve issues much faster than individually addressing them with phone calls.  

6. Communication with vendors and other stakeholders 

Your vendors, real estate agents, realtors, landlords, property managers and other stakeholders can communicate and get updated with vital information on the Yardi dashboard. If all the stakeholders in your business are not updated with real-time information, it can be a big mistake. This can lead to a lot of miscommunication and can cause problems in sales and team coordination.  

7. Construction management at your fingertips 

But does this rise dampen your real estate business? It might do that as a primary effect, but you have to plan your strategy and leadership so that you can steer through this and still drive sales. Understand what this means for the housing market, and then rethink your property management and real estate sales strategies to impact your ROI positively.  

1. The effect on mortgage rates 

Though the Federal Reserve directly does not increase the mortgage rates, any talk or decision by them directly affects the mortgage rates. So, at the beginning of 2022, when the Fed had not even announced any hike in interest rates, the mortgage rates had already shot up. Fortune news reports on an analysis by expert economists say that if the Fed keeps increasing its interest rates at this pace, the mortgage rate can shoot up to 5% by the end of 2022.  

2. In ripple effect, how do the mortgage rates affect the housing market? 

The mortgage rate rise directly affects the demand for housing. That is why the all-time low mortgage during the pandemic saw a major boom in sales in 2020 and 2021. In December 2021, the mortgage rates were at an all-time low at 3.1%, which encouraged many homebuyers to even aim for a second home. Within a few months, the interest rate shot up to 5.27% in the first week of May. It is the highest rate since 2009; housing is becoming more unaffordable for the average masses and is making many people roll back on their immediate real estate plans.  

As Bankrate’s experts say, the housing market has many more factors affecting its graph than just the Fed rates, so it is hard to completely predict the housing market's future for now. In the near future, the rising interest rates are definitely a problem for both homebuyers and sellers, which means terrible business for real estate companies. 

But you have to offer something extra and exclusive to your potential customers to make positive sales. Here’s all that you can potentially offer. 

• Sustainable housing options to help your customers see a long-term future investment in the homes than just the short-term money burden. 

• Start thinking about smart homes to ease your homebuyers' lives and hit the right chord with them. Investing money in developing smart homes will definitely drive your sales because the new-age homebuyers are very high on good technology use inside their homes.  

Builder news reports say that millennials are ready to pay as much as 20% extra to buy or rent homes with smart technology to ease their daily lives. You need to tap into this booming market to impact your sales.  

• Due to the rise of remote work in the post-pandemic scene, there is a rising demand for open spaces and leisure activities inside multi-family homes. You can rethink your house plans and add more options for open spaces to attract these stay-at-home working crowd and make sales. Providing these extra facilities will incentivize your potential homebuyers to move forward with their deals.  

• Control, manage and optimize specific facilities 

As a property manager, you can choose the specific areas in your facilities that need to be managed. This software dashboard has all information about your asset types, their life-cycle, replacement history, the present conditions registered in one place. Your agents and managers do not need to physically travel to each location every time they need to collect data. The Facilio dashboard does that for you.  

• Predictive and planned maintenance 

When property managers and owners already have real-time data about their assets, they can predict their maintenance needs. This will help them plan ahead and schedule maintenance plans and improve the budgeting and forecasting of the business. iOffice and SpaceIQ study believe that facility management technology has helped businesses reduce maintenance costs by 3.3%. A 3.3% average reduction indeed is a huge positive impact on the company's ROI.  

• Energy data about each facility 

The Facilio software is IoT-powered software that gets facility data, analyzes, and gives sustainability insights on your assets. They have an energy dashboard for your facility where property managers can find real-time data and analytical facts about their energy usage to impact energy saving positively. They can understand and predict the future energy consumption of your facilities and help you solve them beforehand.  

• Real-time management and upgrade 

When all the information about your assets is found in the cloud under one umbrella, then you can upgrade them as and when you want. You can track the subscription limit of things, expiry dates, renewal timelines, breakdowns or malfunctions, and much more on their dashboard. No more hassling with tenants over the delayed upgrade of your assets when you can stay ahead of the curve with Facilio integration.  

• Reach your sustainability goals 

It is the dream of property owners and managers to get green buildings and Energy Star assets to optimize their resources. Having these certificates is all about reducing companies' carbon footprints to impact the environment positively. Green buildings help you be environmentally conscious, make assets efficient, and impact profit in the long run. The New York Times writes about the growing green bonds and sustainable projects in recent years. Though you might not want to take your properties this far, sustainable projects are on the rise, and you need to start investing in the right technology.  

• Asset management for better tenant relations 

When your property manager has access to helpful information about their assets, they can immediately solve them. Tenants will build more trust in your services, resulting in better tenant retention and lease renewals. Any single tenant turnovers cost around $1000 - 5000 in the USA. That is the amount of money you will save if you establish better tenant relations by providing impeccable maintenance services.  

• Efficient workflow for all stakeholders