Lease agreements can be very lengthy. Based on the timeframe of the lease, along with different terms and conditions, the length of the lease agreement varies. Short-term lease agreements may be about 12 pages long, whereas long-term ones may exceed the 50-page mark as well.
Going through so many pages to find the information that you require can be a very cumbersome process. Fortunately, outsourcing lease abstraction services can help overcome this challenge. Let us understand what these services are below.
The lease abstraction technique involves extracting vital information from a lease agreement to create a short and crisp version. This easy-to-read and easy-to-understand version make it simple for you to find the necessary information quickly.
Lease abstraction services help you in this process by making it hassle-free. These services leverage the power of technology to extract information from lease documents accurately.
But who requires lease abstraction support services?
Any individual or organization that deals with lease agreements can benefit from such services. These parties include:
Instead of going through each page of the lease agreement by yourself and manually extracting information from it, you can outsource the task to third-party companies. Here are a few benefits of doing so.
For any real estate company or lending organization, team productivity is vital. When you and your team members sit to perform lease abstraction tasks, you may end up wasting a lot of time.
Think about it. Going through tens of pages in an agreement to collect all the necessary information, and creating a crisp abstract, is neither an easy job nor a quick one.
Instead, you can outsource your lease abstraction tasks to real estate outsourcing companies. When a third party looks after your abstraction duties, you can focus your attention on other activities. This way,
Humans are prone to making errors. On average, humans make three to six errors every hour. When your team manually goes through the lease agreement to extract information, there are bound to be a few errors.
As lease agreements contain personal, financial, and technical information, data inaccuracy in the lease abstracts is not desirable. Any inaccuracies in the abstracts may lead to a loss in money or real estate property.
When you leave the abstraction duties in the hands of professional outsourcing companies, the chances of an inaccurate abstract are little to none. Being professionals at the job, they ensure accurate lease abstracts at all times.
Some lease abstraction companies even utilize modern-day techniques like Machine Learning (ML), Natural Language Processing (NLP), Optical Character Recognition (OCR), and computer vision to extract data accurately, even from unstructured documents.
This way you get high data accuracy in abstraction instead of the poor mistakes you are likely to make manually. Those mistakes could also lead to increased expenses later, so in a way, you are also saving costs.
Outsourcing lease abstraction services to third-party companies can be cost-effective in numerous ways.
Thus outsourcing lease administration and abstraction saves you money and time while also helping you stay away from expenses that incur due to mistakes in the abstraction process by giving out only highly accurate abstracts.
Outsourcing lease abstraction companies that create abstracts for your leases are all professionals. Each member is trained to abstract leases in quick time while maintaining high levels of accuracy.
The top companies offering outsourcing lease abstraction services generally get many leases from different sources and companies like yours. Hence, their workforce is also high to manage such large volumes of leases.
Lastly, one of the vital purposes of automation is to speed up manual processes. Hence, firms that automate lease abstraction through different technologies, as mentioned earlier, offer a quick turnaround time.
So a task that would have taken you and your team days if not weeks to complete manually takes considerably less amount of time with a property management company using automated lease abstraction.
Assessing one or a few leases to abstract can be a complex task in itself. Imagine working on a portfolio of properties, each having different leases. Each lease is unlike, as it has its terms and conditions. Abstracting documents in such situations can cause big headaches for you and your team.
Outsourcing lease abstraction can eliminate this headache for you. With accurate lease abstracts containing the necessary and relevant information, lease abstraction companies have proven to be efficient in handling and managing a property portfolio.
Without a doubt, data confidentiality is the most crucial aspect of real estate properties and lease abstraction. Lease agreements contain a lot of vital information. When you obtain such information from the buyer, you must ensure data confidentiality.
But more importantly, when you outsource lease abstraction to a third party, you must ensure that they understand the importance of the data and have the same beliefs as you on data confidentiality. Most of the top lease abstraction companies are serious about their business and guarantee data confidentiality.
So, when you outsource lease abstraction services, you can keep the worries about data leaks at bay.
The last and quite important advantage out of the advantages of outsourcing lease abstraction is better compliance management. A lease abstraction company will provide you with all the necessary financial reports and statements on a monthly basis.
Each report and statement is scrutinized by professionals. This helps you adhere to the financial requirements of your real estate investment by eliminating any chances of mistakes that could lead to non-compliance with the laws.
These reports also help you manage your investment and keep in line with your goals based on the monthly statements.
Lease abstraction can create major headaches when you analyze and evaluate each page. However, it can create an even bigger headache and damage your success rate if you do not perform it right.
Outsourcing your lease abstraction duties to third-party service providers such as lease abstraction companies can prove to be an efficient, accurate, quick, confidential, compliant and cost-effective option for you and your real estate investments.
OHI is a fifteen-year-old real estate services company working with 50+ commercial and residential real estate developers, funds and property management companies across USA. Our deep expertise in real estate accounting, financial analysis, lease abstraction, administration and asset management has helped clients cut associated costs by 40-50%. We currently provide these services to a portfolio of 50000 units across clients.
We invite you to experience leasing and accounting outsourcing through us.
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