If financial planning seems like an impossible task for you as a rental property owner, there is a solution. Property management companies can aid you in various ways, most importantly, by offering detailed owner statements.
Owner statements provide rental investors with a complete overview of their property's financial performance and health.
Ready to check the pulse of your properties? Let's get started by diving deeper into the world of owner statements.
What Are Owner Statements?
Owner statements refer to financial performance reports for your rental properties. These detailed documents are provided by a property management company and reflect income, expenses, and net earnings over a period of time.
You'll find other critical components of rental income and expenses records in an owner statement, such as:
- Total property earnings
- Tenants' rent
- Maintenance costs
- Property management fees
- Insurance costs
- Landlord taxes
A critical element of an owner cash report is the property's net income. This number is calculated by subtracting the total expenses from the total income.
Property owners use this number to get a clear idea of the profitability of a property.
A property management company will provide owners with these statements weekly or monthly, depending on the frequency agreement.
The Importance of Owner Statements
Property owners find owner statements important because they offer accurate and well-organized property information.
This report allows property owners to encapsulate their property's financial health and make informed decisions about the future of their investment. The information in an owner statement will allow owners to:
- Track property revenue
- Control costs
- Assess cash flow
- Evaluate overall investment performance
The right property management company will allow you to learn about your properties more than you could if you were managing them on your own.
Understanding Property Performance
Because an owner statement serves as a roadmap to your financial performance, you also get an overview of property performance. An owner statement includes KPIs like rental income, expenses, and occupancy rates.
Rental income and expenses give you an idea of your revenue and costs. Owners can monitor these numbers over time to find trends helping you anticipate future performance.
The occupancy rate refers to the demand for your property. If you have a high occupancy rate, your property performs well.
A low rate often signals high vacancy rates and indicates you have problems you need to address. Consider looking into your property's condition or rental rates. Your rent could be too high for your area.
Once you start receiving owner statements, compare present data with past data to get a holistic view of your property's health.
Working With Experienced Property Managers
Working with experienced property managers comes with a lot of benefits. One benefit is that you can receive regular owner statements to understand the financial health of your property.
If you have more than one property, you will receive owner statements for each of them. At Blue Line Property Management, we know the importance of these documents.
Contact us today to see how we handle owner statements for our clients.
