What action should a property manager take if they experience a shortfall in income for the month?

When a property manager experiences a shortfall in income for the month, utilizing a reserve fund is a prudent and effective strategy. Reserve funds are specifically set aside for situations like this, where unanticipated expenses or lower-than-expected income may occur. By covering costs from a reserve fund, the property manager can maintain operational stability without putting immediate pressure on the owner for additional funds, which can strain the owner-tenant relationship.

This approach also allows time for the property manager to assess the situation and make informed decisions, rather than resorting to potentially more drastic measures like increasing rent or cutting costs that could harm the property’s value or tenant satisfaction. Efficiently managing cash flow and having a plan for emergency funding is a fundamental part of property management, ensuring that both the property and tenant needs are adequately met without severe financial disruption.