How to Properly Match Accounting Items with Corresponding Income and Expenses for Better Financial Management

When looking at the T12 of a property you're underwriting, you always want to make sure certain other income items have a correlating expense.

For example, these other item items could include:

1. Cable and Internet Income and Expense

2. Utility Income Income and Expense (Paying a third party RUBS billing company to calculate the amount tenants owe for their utility usage)

3. Rental Insurance Income and Expense

4. Credit Builder Income and Expense (A service which enhances the tenant's credit score as they rent from you)

5. LeaseLock Service Income and Expense (Tenants paying a monthly fee to the LeaseLock company instead of one lump sum security deposit)

How it works is the owner will pay for these services, and then then will also account for the income that the tenants pay to use them. Ideally, the income produced from each item exceeds the expense.

What you don't want to see is the owner not understanding this concept of having an expense and income input for the same item. Always check this because I've seen both from a T12 and also from broker proforma that the income from the item is shown, but not the accompanying expense. Sometimes they could be combining the two into a net income for the line item, but they could also just be leaving out the expense.