And so that is what you saw drive our fourth quarter bad debt in the 1.4% area. And given just a slow moving timeline on some of these final resolutions, at this point, we’ve conservatively assumed that our current level of bad debt in the 1.4% area continues over the course of 2023. But our hope is that we may be able to do better than that. But just given some of the aspects of that timeline that are out of our control, we wanted to make sure we started the year with a conservative improvement view on that timeline.
Bryan Smith: And Juan, this is Bryan. To answer the second part of your question, we’re really seeing it can be divided into really two areas of specific cohort of the kind of the impacted accounts. First, there are some procedural requirements in Washington that are causing significant delays. That’s probably the most concentrated area. And second, as Chris mentioned, there’s really just core backlogs and the process has been elongated significantly in some other states such as Georgia and North Carolina. We’re working through it as quickly as we can. I had hoped that we could get it — we would have it resolved by now, but we are continuing to process. And the state of Washington is what not Washington, D.C., just for reference.
Operator: Thank you. Our next question comes from Josh Dennerlein with Bank of America. Please proceed with your question.
Josh Dennerlein: Yes, hey guys. Thanks for the time. I guess I wanted to kind of touch base on maybe some of the underlying assumptions in same-store expense guidance. I was just hoping you guys can elaborate on what your expectations for turn is in the portfolio? And then what’s embedded as far as turnover cost?
Christopher Lau: Yes. Good morning Josh. Chris here. Why don’t I unpack the pieces just to put all of this in context, and then I’m sure Bryan has some thoughts on a few more of the assumptions of what we’re thinking about. But in terms of major components of the expense guide, remember, we’re expecting 9% property taxes at the midpoint, which we talked about a couple of minutes ago. And then that comes to about 10% to 11% or so on everything else, driven by a couple of different key considerations. First, about 20% or so on insurance. Our insurance renewal is still in process of being finalized. We’re not quite there yet. But as we all know; the property insurance market is very challenging right now. And we want to make sure we have that factored into our expectations on the year.
Two, as I mentioned a minute ago, 12% on property management. As I mentioned, that reflects the inflationary environment. the year-over-year comping of some of last year’s understaff miss at the very beginning of the year and then the investments into our Resident 360 program. And then inflationary-like increases on R&M and turn costs in HOAs in, call it, the 7% area or so, all of which gets you to the midpoint of 9.75%. But before Bryan shares any other color, I just wanted to remind everyone, when we’re thinking about expenses in 2023, don’t forget that because our Texas property taxes were under accrued for the first nine months of 2022, which were trued up in the fourth quarter of last year, our 2023 expense growth is going to be lumpy this year with higher growth in the first nine months, which will then normalize in the fourth quarter into our expected guidance range.
