Did you know that about 70% of rental properties are owned by individual investors? Investors utilize real estate to generate wealth, but not many investors are equipped to become landlords or property managers.
If you don't know how to manage rental units, you likely don't know about owner statements and reporting either.
Keep reading to learn more about owner statements and why they are important.
What Is an Owner Statement?
An owner statement or owner report is a tool used by property management to provide consistent reports on the standings of a property. The main purpose of this report is to track a property's cash flow.
Owner statements and reporting include the following elements:
- Lease information
- Utilities paid by tenants
- Administration payouts
Property owners can use the information in owner reports to help with maintenance coordination, lease renewals, and lease enforcement. Make sure you are following landlord-tenant laws during the process.
Owner Statement Layout
Owner statements should have a preparation date, owner names, and contact information. The report will start with a beginning statement balance carried over from the last statement.
The breakdown of expenses will be categorized by property type. Commercial properties will be listed before residential properties in most cases.
Expenses will be detailed with a description of activities performed and associated costs, such as maintenance, turnover, and repairs.
Owner draws or owner disbursements are funds that the owner keeps during the statement period. They will be added to the expenses column.
The document will also include each building's rental income and a calculated net total.
Tips for Owner Statements and Reporting
Producing great owner reports is essential to running a rental property business. To do this, you'll want to follow these three tips:
- Set a reporting time period
- Keep steady deadlines for reporting
- Set a date for the report to be sent out
You can create and distribute owner statements monthly, quarterly, or yearly. Monthly is the typical choice.
To ensure you are keeping steady deadlines for reporting, tenants should pay rent on time. If you want to avoid letting things slide over to the next month, keep reports accurate and relevant.
Property managers should account for fees and payments each month so that reports are ready to be sent out on a specific date. This keeps the property organized and the owner calm.
Owners shouldn't have to create and manage these statements, a property manager will do this. Better yet, working with a property management company is the best choice.
Hire Property Management Services
Property management services can aid rental property owners with a lot of necessary business tasks. Not only can they handle all of the property income and expenses, but they can create owner statements.
Owner statements and reporting are organizational tools that provide details on the financial standings of a property. Owners have the luxury of getting a clear picture of what's happening on their property without being there.
Are you ready to maximize owner profitability? Contact us today to learn how our property management services can help.