Annual Budget Preparation Checklist

Export the trailing 12-month P&L and rent roll from AppFolio, Buildium, Yardi, or whichever PMS the portfolio runs on. Pull at the property level, not consolidated — most variance hides at the asset.

Run the budget-vs-actual report at the GL level. Watch for the usual culprits: turnover make-ready over budget, R&M creep, insurance premium escalations the prior budget didn't anticipate.

Most owners want a written explanation for any line over 5% off budget — favorable or unfavorable. Note whether the variance is one-time (a roof replacement) or structural (vendor pricing reset).

Start from the current rent roll, layer in scheduled bumps from existing leases, then apply the assumed market increase to units that will turn or renew. Capture vacancy loss and bad debt as separate lines, not netted into GPR.

Pull the trailing renewal rate from the PMS — most multifamily operators target 55-65%. Build concessions (one month free, look-and-lease) as a contra-revenue line so owners can see the gap between asking rent and effective rent.

Landscaping, trash, pest, pool, elevator, and HVAC PM contracts typically renew annually with 3-7% escalators. Get fresh quotes on any contract over the firm's threshold (commonly $10K) rather than auto-renewing.

Pull the latest assessor notice and your insurance broker's renewal estimate. Coastal and wildfire-zone assets are seeing 20-40% premium hikes; assuming flat is a common budget miss. Note any tax appeal in flight that could move the needle.

Forecast routine R&M per unit per year, then layer turnover make-ready cost per expected vacate. Industry benchmarks: $400-800 per unit R&M, $1,500-3,500 per turn depending on class and length of tenancy.

HOAs require a current reserve study by statute in most states; for-profit owners use one as best practice. Check whether reserve balance is on track to fund the next major component (roof, paving, paint cycle) or if a special assessment is implied.

For each capex project (roof, paving, exterior paint, appliance refresh, amenity renovation), get at least two written bids. Tag each line as repair (deduct in year) or capital improvement (depreciate) — misclassification creates owner-tax-return headaches in January.

For HOAs, follow the bylaws on notice period and member vote thresholds. For investor-owned assets, send the capital call memo with the project scope, bid summary, and timing. Surprises here destroy owner trust faster than any other budget item.

The maintenance supervisor knows which boilers are limping toward replacement and which units always come back rough. Capture this list in writing — it is the difference between a forecast that survives Q2 and one that needs a mid-year reforecast.

Confirm hold-period intent, target NOI, distribution expectations, and any planned refinance or disposition. A budget for an asset selling in 18 months looks very different from one held to a 10-year horizon.

Value-add work (unit renovations, amenity upgrades) should map to the rent premium it justifies. Sequence the projects so completed units hit the rent roll before disposition or refinance, not after.

Per-lead and per-lease cost vary by submarket. Budget the syndication mix (Zillow Rentals, Apartments.com, ILS contracts) plus any paid social, signage, and resident referral fees. Stabilized assets often run $150-400 per lease; lease-up is multiples higher.

Package the property-level P&L, capex schedule, reserve plan, assumptions memo, and variance commentary on the prior year. One PDF per property plus a portfolio roll-up; owners should not need to ask for the supporting detail.

Walk through the assumptions, the variance memo, and the capex sequencing. For HOAs, this is usually a noticed open meeting per the bylaws — confirm the notice window before scheduling.