There's more to owning a real estate investment property than finding tenants and enjoying passive rental income. Keeping your tenants happy and preserving the value of your property involves careful property financial management.
Property management reports are a major part of these functions, and they're more important than ever now that the IRS has reduced the threshold for reporting rental income. When you work with a property manager, you receive these documents every month when they pay your owner disbursements.
If not, you should still compile owner statements and reports every month to help you keep track. Read on to discover more about what's included in a property management report.
What's Included in Property Management Reports?
Property management reports help you gauge your investment returns at a glance. They comprise two important sections:
Owner Statements
Owner statements provide an overall view of your properties' financial performance. They consist of:
Income Statement
The income statement itemizes all the income generated by your property for the month. A property manager uses this as a starting point for calculating property owner payouts for each month.
Some of the income associated with rental properties includes:
- Rent payments
- Late fees
- Parking fees
- Laundry fees
- Pet deposits
- Security deposits
This section of the owner statement helps you pinpoint outstanding payments and identify habitual late payers.
Monthly Operating Expenses
Monthly expenses include all the costs associated with keeping your property livable and managing your tenants. Some typical costs are:
- Property taxes
- Insurance
- Utilities
- Repair and maintenance costs
- Landscaping
If you work with a property manager, their monthly fees form part of these expenses. A property manager can help you analyze this portion of the statement to identify areas for cost savings.
Many of these costs are tax-deductible, too.
Net Profits
Net profit refers to the difference between your income and expenses. If this part of your statement consistently reveals a negative amount, you need to make some changes.
Hire a property manager to help you set a more profitable rent in line with market trends or assist you in identifying areas for improvement.
Operational Reports
Operational reports contain information about the finer details of your rental business. They usually include:
- Lease information
- Details about maintenance and repairs
- Occupancy statistics
- Tenant feedback
- Property marketing statistics
This information is useful for monitoring your property's performance and helping you identify areas for improvement.
Maximizing Your Owner Disbursements
Property management reports are key to understanding how to make the most of your property investments.
Working with an experienced property management team helps maximize your owner disbursements thanks to careful record-keeping, real estate accounting, and reporting.
Key PA Property Management can help you keep track of your income and expenses to identify areas for savings and help you set profitable rents. Our expert tenant management services help limit costly vacancies, and our maintenance coordination program prevents unnecessary repairs.
We are a local company backed by a national franchise with over two decades of experience in Pennsylvania real estate. Get on board with us to discover the true meaning of earning passive income.
