The Common Area Maintenance or CAM reconciliation process can be a very hectic task, especially when it comes to commercial real estate businesses. With multiple properties to handle, it can be overwhelming. But CAM reconciliation is crucial nonetheless and property managers can not afford to avoid it. CAM is a part of every lease shared with tenants, and a lot of monetary transaction banks on it for any property owner or manager. Due to missing data and discrepancies in agreements, landlords stand to lose a lot of money. Though this process is tedious, you still need to ace it to get maximum return on your ROI.
You need to better your strategies in handling CAM work to improve your leasing strategies.
Read this blog to understand the details of how CAM reconciliation negatively impacts real estate and how improving it can benefit you.
The adverse impact of flawed CAM Reconciliation
Some CAM areas might be easier to understand, like property taxes and insurance calculations. But the essential maintenance part can be very tricky given that a standard charge is divided among multiple stakeholders of different units in the same building. Any data error can simply lead to overcharging or undercharging tenants and messing up your lease agreement. Here are a few of the grave impacts of imperfect CAM reconciliation on your real estate business,
The conflict between landlord and tenant and extended negative impact on business growth.
Inaccurate cost classifications
Due to miscalculations, landlords paid out of their own pockets for CAM work when lease agreements said otherwise.
Wrongful interpretation of lease terms and conditions leading to uninhabitable conditions.
Also impacts tax payments in the end when lack of data leads to tenants paying less than what is required of them.
It can be a major legal battle when you have improper expense classification in your buildings and units. You need to thoroughly recheck all data before assigning expenses to each building to not lose out on tenants.
How proper CAM Reconciliation can help improve the situation
CAM reconciliation has an obvious impact on the finances of your business. But the CAM reconciliation process also can help landlords maintain their position in the real estate market and also improve their property leasing strategies. Let’s talk more about that to help you understand why you need to rethink your CAM work.
• Improved tenant relations
In most lease agreements, tenants feel that their landlord is overcharging them for things that are not their responsibility. The legal terms and everything can be open to interpretation, and all stakeholders want to steer it their way and gain some. Lack of expense invoices can lead to tenants paying more, or no proper statements can have landlords earning less. In both cases, the long-standing relationships are jeopardized.
Improved landlord and tenant relations can help in lease renewals, low tenant turnovers and improved reputation in the market. But when you keep clarity in your CAM reconciliation process and have proof for all expenses, then your tenants gain trust in your work ethic. Also, when there is transparency, all your payments are released on time, and your leasing strategies see a positive boost.
• Getting better sales in a competitive market
When you improve your tenant relations, it also makes your holding on the market much stronger. In this competitive market, if the reputation of your real estate business takes a hit, then your sales will go down. The commercial real estate market has already suffered a lot due to the pandemic.
As a leasing strategy, landlords and property managers can choose to provide some incentives in their CAM charges and retain long-term tenants. A controlled and streamlined CAM reconciliation process can help you better this process. A proper technology implementation plan can help solve this. Yardi CAM reconciliation software is one such provider that can give you quick CAM solutions. This software will also draw up valuable insights from the industry and stay ahead in the competition to drive sales. Strategically automating your CAM reconciliation work can get you more control over your lease agreements.
• Revamping and negotiating the future lease agreements
When you as a project manager have a stable image of doing great CAM reconciliation work, you can easily negotiate new terms during your lease renewals and new agreements. Staying clear about costs and providing enough data to help tenants understand every point of your CAM statement is one of the best project management best practices that you can establish.
Taking inspiration from previous reconciliation work, you can even come up with agreement terms and conditions that are beneficial for all stakeholders. This will help establish a stable foundation for your business. You can even get real estate lease audits done by neutral third-party auditors to straighten facts in your lease.
Why you should outsource your CAM Reconciliation work for a better lease strategy
Are you stressed out about the CAM reconciliation process? Don’t be when you can simply outsource the work to experts and shed the load from your shoulders. A team of experts who have done CAM reconciliation work for years can help you save money, better your tenant relations and find useful data to increase sales. An outsourced service provider will also have access to the latest technology, which you can leverage to automate the CAM work.
At KriyaGo, we have the needed professional resources, a team who will customize them based on your business needs and stay within your budget. Fromauditing leases to lease abstraction services and finally getting CAM reconciliation, our team can do it all.
Final Take
Though CAM charges vary from property to property, there are some common charges that are the same for most properties. Like pest control, insurance, utilities, security, etc. You need to keep constant track of these to manage your portfolio's daily operations properly. From financial stability and seamless cash flow to improved leasing strategies, proper CAM reconciliation work can have a lot of great impacts.
This volatile real estate market does not depend on the chance to establish a proper CAM process. Take charge and outsource your work to industry experts. Call KriyaGo today and understand how we work. Talk soon!
