How do you validate the claimed expenses

[Saman Jafari]

Hey all, 

I am having a  hard time with my property managers to validate the expenses they claim. For example, one of them changed tge AC for around $1500 without getting approval and this month I get nothing from two properties because this expenses and some others that are not clear for me what those are. 
I am wondering what is the best practice for being able to grow ? 
I know that some of these can be addressed in a contract for getting approval and etc. Or I was thinking to have an accountant to check their expenses end of month and validate the expenses they did ( not sure anyone else here  takes this approach) but curious to know what your best practice is that works

[Richard F.]

Aloha,

Any competent PM should be providing you with monthly financial reports showing all income and expenses, and including copies of invoices paid during the reporting month.

If they are making repairs with their own, in-house staff, I would require itemized receipts for materials and separate hourly labor charges.

Your Management Agreement should also have a per incident limit, which they cannot exceed without your approval, except to protect life or property. This limit should be at a minimum, $1000 in most markets. Owners that want to approve everything over $250 are just control freaks, and I won't work with them.

Bottom line, if you have trust issues with your PM, you probably should change PM's.