You may start by purchasing one or two rental properties. But after several years in the business, you might own dozens of properties.
Of course, owning rental properties is a great way to earn a living. However, some of your properties might be more profitable than others. How do you find this out?
You can determine the profitability of your properties through owner statements.
If you don't know what these are, you need to learn. Owner statements are an essential part of every rental property business.
Keep reading to learn the basics of owner statements.
Purpose of Owner Statements
Owner statements are financial documents revealing a property's profitability. They also explain essential financial details about the property.
Rental property owner statements help property owners learn things about their rental units. There are more than 49.5 million rental properties in the U.S. Each is unique and has its own details.
Having owner statements helps you learn the important details for several reasons:
- Determine rental rates
- Decide to renovate units
- Change things about the properties
- Sell the properties
You analyze the information the reports contain. You can create the statements yourself or hire a property management firm. Property managers do many things, including the preparation of financial statements.
Information They Contain
An owner statement is for one property. Therefore, you'll have 10 owner statements if you own 10 rental properties. You'll need to learn how to read an owner statement to get the most out of it.
First, you'll find the property's rental income for the statement period. Next, you'll find the property's expenses. Then, you'll see the difference, which represents its net income or loss.
Additionally, they often include a list of unpaid expenses. This list should state the expense type, amount, and due date.
Supplemental Information They May Contain
Owner statements often include other information. For example, they might include tenant turnover rates. They may have information about lease renewals or unoccupied time.
Owner statements might include security deposit amounts and lists of work the units need. You can also expect to find the property taxes and insurance amounts listed on the form.
These statements may include any other pertinent financial details relating to the property.
How to Create Them
Creating rental property owner statements requires time and work. You begin by gathering all the information needed for the reports. Next, you compile it into a report.
When you outsource your property management, they will do the work for you. This is one of many reasons rental property owners outsource these duties.
Talk to a Property Manager to Learn More
As you can see, owner statements are helpful documents. They reveal each property's profitability. You can use them to make vital decisions for your business.
Do you need help creating them or managing your properties? Look no further.
Round Table Property Management operates in Jacksonville. Our team of experts has over 40 years of experience in real estate. Therefore, we have experience you can trust for your rental properties.
Reach out today to learn more.
