All property management companies should issue owner statements for their landlords at least once a month. These documents contain vital information to help investors gauge the health of their portfolios.
If you are new to the intricacies of rental property management or you've just received your first owner statement, you probably need some help decoding it all.
Read on to explore the basics of owner statements.
What are Owner Statements?
An owner statement is like a report card for your property. It contains several critical elements to help landlords keep track of their income and earnings.
With the new tax laws coming into effect next year, you must pay attention to every detail recorded on these statements.
Decoding Your Owner Statement
Owner statements are a vital tool for keeping your finger on the pulse of your property's profitability.
If you own multiple properties, one of the most important KPIs on your owner statement is the occupancy rate. A low occupancy rate can indicate areas for improvement. You should work with your property manager to remedy these aspects.
Most of the other information provided relates to landlord finances, such as:
Rental Income
Here, you will find a detailed overview of all the income generated by your property. It includes rent, late fees, and payments for amenities like laundry or parking.
This section can also help you understand your rate of on-time rent collection.
Monthly Expenses
This section lists all the costs involved in operating your property for the month. It includes things like:
- Repair and maintenance
- Insurance premiums
- Property management fees
- Incidental costs
- Property taxes
Many of these owner payments are tax-deductible, so they're important at tax time.
Discuss these costs with your property manager to see if you can figure out ways to optimize your income by reducing costs. Keeping track of your expenses monthly instead of annually allows you to act fast if you need to cut down on costs.
Net Income
Net income represents the overall profitability of your rental real estate. It's calculated by subtracting the total expenses from your total income. Simply put, a negative number indicates you're running at a loss, while a positive amount shows your profits.
It's not so simple to rectify the situation if your net income is in the red. Again, your property manager can help you figure out what went wrong and suggest improvements.
If your monthly profits are consistently lower than expected, it might be time to rethink your rent or invest in cost-saving upgrades for your property.
Stay on Track with Your Investment Properties
PMI Property Service provides each of our owners with detailed, easy-to-understand owner statements every month. They can access this information and anything else they need via our convenient owner portal.
This is just a small part of our ongoing commitment to service excellence in property management. We offer a range of services suited to every property owner and back them up with clear-cut communications and detailed record-keeping.
If you haven't discovered the PMI difference yet, it's time you did.
