This year was certainly abnormal for budget planning due to the pandemic. It’s not prudent to base 2022’s budget based on 2021 actuals. It’s important to recognize areas that have become more critical, like turnover, raising rents and reducing loss to lease. 

Despite the not-so-average year, we're only two months away from 2022, which means your 2022 property budgets should be nearly finished by now. Are they? If not, there are things you can do to get your budgets moving forward and on track for the new year.

Here are six steps to get you back on track:

1. Start with reviewing how you assigned responsibilities regarding the budget last year and ask yourself if those assignments worked well. Whose input was valuable? Who got it right? A good rule of thumb is to include the property manager, regional manager, human resources and accounting. After each group has added their own input, a final review should be conducted by either the controller or CFO. Then create a timeline of who will handle what tasks; for instance, the marketing manager will review the marketing budget and the regional manager will recheck occupancy and complete the final review.
2. Review your data from this year to combine with data from prior years. While it's not a complete look at this year, the contracts, expenses and revenue should still give you a strong grasp on the trends for the end of the year going into the next fiscal year. These trends are vital in preparing a budget that takes into consideration any upward or downward shifts your property has seen over recent years.
3. While looking at this year's budget and data, evaluate if any new budget categories should be created. Ask each group included in the process if all categories were used, or if any can be removed. Additionally, ask if any new categories should be added to capture any revenue or expense that isn't currently being captured.
4. Once you've completed your research, compare your numbers to market data you find for properties that are similar to your size. See if contracts are comparable to properties your size and in your area, and if you're spending similar amounts in your budget. If there are large discrepancies, review what the differences are to see if they are in your favor, or if any part of the budget or contracts should be reviewed further for a better benefit for your property.
5. After data is compared, it's now time to start developing your first draft for next year's budget. If your budget software seems outdated, this is also the perfect time to look at options for property management software to make sure it includes a budget application to your liking. 
6. All that's left after creating the draft is to fine tune and finalize. Once the fine tuning is done, the budget should be set in stone with no other modifications allowed.