What does Pass-Through Income refer to in property management?

Pass-Through Income in property management specifically refers to additional charges that property managers or owners bill to tenants for operating expenses. This can include costs related to maintenance, repairs, property taxes, utilities, and other expenses necessary for the upkeep of the property. The key aspect of Pass-Through Income is that these charges are typically passed directly to the tenants rather than being absorbed by the property owner. This practice helps ensure that operational costs are covered while providing transparency to tenants regarding what they are paying for in addition to their base rent.

The distinction is important as it allows property managers to keep rental rates competitive while still recovering costs associated with property management and maintenance. Understanding this concept is crucial for effective financial planning and operational transparency in property management.