Omaha is an excellent choice for astute property investors thanks to reasonable property prices, economic stability, and forward-thinking initiatives. Despite these positives, landlords can always benefit from tracking the profitability of their rental units.
Property managers provide landlords with owner statements and reporting to help them do just that. These documents are vital for strategizing, identifying areas for cost savings, and completing your tax returns.
Read our owner statement breakdown to discover how this information can work for you.
What Are Owner Statements and Reports?
Owner statements and monthly reports for owners are like progress reports for your investment properties. They summarize your property's performance, so you can access the most valuable information at a glance.
Owner reports contain general information about your rental properties, while owner statements provide more detailed financial reporting.
What's Included in Owner Reports?
Owner reports ensure property management transparency. They highlight many of the main components of successful property management.
These include:
- An overview of your property leases
- Occupancy rates
- Maintenance and repair reports
- Tenant feedback
- Property marketing statistics
They're highly effective for comparing properties in your portfolio against one another and can help you pinpoint seasonal fluctuations versus ongoing issues.
Owner statements are a part of your owner reports.
Owner Statement Breakdown
Owner statements always have three main components. These are:
Income Statement
This portion of the owner statement lists all the income associated with each property for the month. This includes rental income, security deposits, late penalty payments, parking, and laundry fees.
You can easily identify outstanding amounts and habitual late payers by studying these financial figures.
Expenses
Every property incurs ongoing and extra expenses. Some of these amounts are monthly payments, while others, like repair costs, occur only occasionally.
Examples of property expenses include:
- Property taxes
- Landlord insurance
- Property management fees
- Routine maintenance costs
- Mortgage payments
This part of the owner statement is important when completing your taxes, as many of these expenses are tax-deductible. An experienced property manager can help you identify areas for cost-savings among these expenses.
Net Operating Income
Your rental unit's NOI (Net Operating Income) equals the difference between property income and expenses. You can use your NOI for the following calculations:
- Debt Service Coverage = total debt service/NOI
- Cap Rate = NOI/property value
Your lender will ask you for these amounts if you need to apply for a second mortgage.
If your NOI is consistently low or negative, you need to talk to your property manager about solutions. A rental analysis can help determine whether it's feasible to increase your rent prices.
You can also work with your property manager to find areas where you can save or consider selling a consistently unprofitable property.
Maximizing Owner Statements and Reporting
Hiring a property manager is the best way to boost your property portfolio's profitability. Providing you with owner statements and reports is just one way they can help you thrive as a landlord.
Aksarben Property Management is a locally owned and run property management company specializing in real estate and relevant financial strategies.
We help our Omaha landlords maximize their investments through a range of property management essentials, including owner statements and reporting. Take steps to maximize your earnings today.
