Property management companies are focusing on lease abstractions as a means of communicating leasing terms with their tenants. Many companies hire an in-house team for lease abstractions. But commercial real estate leases require experts as they are bulky and complicated. That’s why outsourcing is one of the best options for accurate lease abstractions.
A useful lease abstract is much more than a simple summary. It adds value to your property management and improves your overall brand image. It serves as a short explanation of the bulky lease so that everyone can understand it. By outsourcing your lease abstractions, you are not only saving time but also leveraging its many benefits.
Benefits of outsourcing lease abstractions
Expertise
Outsourcing companies have trained staff who are experts in lease abstraction. They have the knowledge and the experience to know how to form abstracts and identify important clauses. Unlike an in-house team, you do not have to train the staff to perform a non-core task. By outsourcing, you can ensure that the abstract is handled by experts who add value to the document. They also understand different resources and know the right one for each client.
Compliance management
This is one of the most important reasons to outsource lease abstractions. Your service provider has experts that can abstract leases and generate reports in compliance with FASB standards. Experienced lease accountants go through every lease to check for discrepancies and errors. Other than these, financial and legal requirements are also checked by the experts. To ensure an error-free abstract, the team might:
Check if the lease is up-to-date
Verify data for accuracy
Perform risk analysis regularly
Outsourcing companies also take care of any legal changes by updating lease abstractions from time to time.
Cost-effective
Outsourcing not only saves costs but also gives you the best service for the money you spend. Companies, on average, spend $1252 to train a new in-house employee. By outsourcing, you gain access to pre-trained staff who also have relevant experience. This saves you the training costs and lets you hire experts to handle your lease abstractions.
Another disadvantage of hiring a new employee is the lack of experience. A single mistake in the abstract can have huge financial impacts. By outsourcing, you can ensure that the abstraction is error-free and all the details are accurate.
Better resources
Outsourcing companies have dedicated software and resources for lease abstractions. As a real estate company, investing in them for an internal team can be expensive. Moreover, lease abstraction is a non-core activity that lets you rarely use the technology. Service providers, on the other hand, only work on lease abstractions. They can not only build a strategy but also have the tools necessary to implement it.
Quick turnaround time
Outsourcing companies also have a quick project turnaround time. Since their core task is lease abstraction, they have enough staff and resources to handle complicated and bulky projects. They are also more reliable. With an internal team, an employee might take a leave or get sick, delaying the abstraction. But with a service provider, there are enough people to handle your work even if a particular employee isn’t available.
Scalable
As your business grows, your leasing requirements and workload will also increase. By outsourcing, you can scale the lease abstractions easily. An internal team will require hiring and training a new employee, which can be time-consuming and expensive. Timely scaling can let your business operate smoothly and efficiently.
Effective portfolio management
Experts convert complex lease terms into simple words that tenants can understand. Instead of the original document, lease abstracts provide clarity to tenants on what they will be signing. This improves communication, increases sales, and helps you manage your portfolio better.
How to choose the right service provider?
Lease abstractions are much more than just summarizing the document. For a good abstract, the service provider must understand how leases work. If you are planning to outsource lease abstractions, here are a few points that can help you find the right service provider.
Experience
Experience is one of the most important aspects you need to consider while hiring a lease abstraction vendor. But experience isn’t only reflected in the number of years they have worked in this field. You need to also look at the industry they specialize in. Do they have experience working in your industry? Have they done lease abstractions for a similar portfolio? These are some questions that can help you find the right vendor.
If you have leases in multiple languages, you need to also check if they have experience in the same. If tenants can understand better in a preferred language, you need to make sure your abstractions do not have errors in any language.
Knowledge
Experience does not always mean more knowledge. The service provider needs to have enough knowledge to explain the process to you. They should also understand the technology utilized for lease abstractions.
A knowledgeable vendor will design effective templates that are essential for abstractions. If the templates do not summarize crucial information from the leases, then the abstracts won’t serve their purpose. A good service provider will walk you through the process while also explaining what is included in the template and why.
References
This is one of the best ways to gauge the quality of service of the service provider. Their current and former clients will provide you with the necessary information and insights that can help you make your decision. Are the clients satisfied? Do they have any complaints? How relevant are their services to you? Ask the vendor for references similar to your industry for more clarity.
Outsource lease abstractions to KriyaGo
KriyaGo understands leases and helps you simplify them through lease abstracts. Our experts have the relevant experience to capture important details while also making the abstracts effective. By outsourcing to KriyaGo, you get better turnaround, modern software, and industry experts. Other than lease abstractions, we also provide lease audits and cam reconciliations. Create effective lease abstracts by reaching out to KriyaGo!
