McCall Caldwell is the Senior Director of Accounting with Forza Management. McCall helps all of our property managers with accounting matters across the Management team's portfolio of assignments.
As the year wraps up, the team at Forza Management is hard at work preparing and finalizing budgets to ensure our clients—commercial real estate owners—enter 2025 armed with the tools to make informed financial decisions. We’re here to give you the skinny on budgets: what exactly is a budget, why does it matter, and how can it serve you as a property owner?
What is a Budget, and Why is it Important?
In a nutshell, a budget is a detailed financial roadmap for the upcoming year. It predicts income, outlines expenses, and helps property owners plan for the financial health of their real estate assets. Budgets are crucial because they’re built on a foundation of accuracy, historical patterns, and financial analysis. This allows owners to make educated projections about what the property will earn and what it will cost, setting the stage for financial success.
A good budget is a bit like a crystal ball—while it can’t predict every twist and turn, it gives owners a reliable look into the future. At Forza Management, we develop budgets to help clients anticipate potential challenges, track cash flow, and manage resources efficiently. With this foresight, property owners can approach the coming year with confidence.
How Can a Budget be Useful?
Budgets play a key role in various aspects of property ownership, from everyday expenses to long-term planning. Here’s how they work in your favor:
Impact on Cash Flow - Personal or Company Finances
A budget's projected cash flow directly influences what a property owner can expect in income and distributions. This clarity can help property owners plan their finances and understand when and how distributions may change. Budgeted cash flow projections provide a clearer view of what’s going on where and when.
Guidance for CAM Reconciliations
CAM (Common Area Maintenance) expenses can be a source of stress without a proper budget. Projecting these expenses ahead of time helps property owners manage and anticipate year-end CAM reconciliations more effectively. A strong budget minimizes surprises and streamlines the reconciliation process.
Financial Reporting and Performance Tracking
Tracking actual performance against budgeted figures allows property owners to see how their properties are performing and where they can improve. This helps in identifying cash flow patterns, understanding tenant impact on vacancies, and gauging overall property health.
Strategic Planning and Tenant Management
Budgets aren’t just numbers on a page; they’re also strategic documents that help property owners manage tenant leasing, project income and expenses, and assess future opportunities. With insights into monthly CAM estimates, tenant vacancy rates, and projected income, owners have a clearer understanding of what adjustments they may need to make along the way.
Collaboration for Client Approval
Budgets are rarely a solo effort—they involve collaboration and multiple steps, from initial planning to final client approval. Our team works with clients to tailor budgets to their unique needs and goals. Whether it’s for a large national real estate investment group, a family-owned portfolio, or a first-time property owner, Forza Management ensures each client has the support and guidance they need.
How Forza Management Makes Budgets Better
We understand that budgets can seem overwhelming, especially for those new to commercial real estate. Recently, our Senior Property Manager, Nicole Rosson, worked with a new property owner to demystify their budget for 2025. Nicole found the teaching aspect incredibly rewarding, helping the client gain financial comfort and a solid understanding of the budget. Forza Management prides itself on this personalized approach, breaking down data into manageable, understandable steps for our clients.
No matter what type of client you are we’re here to help you see the bigger picture and prepare for the year ahead. Because budgets? We give a hoot, and you should, too!
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