Did you know that 20% of American households earn passive income in some form? Owning rental properties is one way to generate passive income.
If you own rental properties, you need to understand the financial elements of your business. Generating owner statements is the best way to get an overview of your finances.
Keep reading to understand owner statements.
What Are Owner Statements?
Owner statements are documents providing detailed accounts of a property's financial standings.
An owner statement is a big deal in accounting. A rental property management company will supply owner statements to property owners each month.
Owners get a very clear picture of everything financial in regards to their property. This information allows them to set budgets and make informed financial decisions about the property.
Owner Statements and Taxes
Owner statements are important tax documents that the IRS will likely ask to see. They use the information from the statements to determine how much a property owner owes in taxes.
Statements will show the IRS what property expenses are tax deductible. Although there are other ways to prove income and expenses, owner statements are one of the easiest methods of determining taxes.
A tax professional or a member of a rental property team can help you understand if owner statements are necessary for taxes.
What's Included in an Owner Statement?
An owner statement is a synopsis of specific items that owners are interested in.
Subreports can be made from owner statements to include things like task reports, income reports, maintenance reports, renter reports, and marketing reports.
In a general owner statement, these items are included:
- List of current tenants
- Rent paid and owing
- Repair costs
- Maintenance costs and payments made
- Income statement
- Bank statement
- Balance sheet
Although most owner reports are given to property owners monthly, other time periods can be set. You can request quarterly or yearly owner reports as well.
No matter what timeline you choose, keep the deadline steady to keep reports accurate.
Property Management Owner Statements
Although you and your current employees can create owner statements monthly, quarterly, and yearly, it's more beneficial to hire a rental property management service.
Utilizing rental property management saves you time and headaches when it comes to property owner responsibilities.
Property management companies will draft accurate owner statements for you. Additionally, they can handle other major tasks, such as:
- Tenant screening
- Rent collection
- Maintenance request management
- Serving eviction notices
A professional manager is the best way to stay up to date on your rental property finances. In the owner statements, these firms will account for their own rental property management fees.
Hire Us for Property Management Tasks
Let's be honest, rental property management tasks are too complex for one property owner to do alone.
Instead of trying to market properties, screen tenants, and create accounting procedures by yourself, hire rental property management services.
Our team can curate and send out owner statements to give you a clear picture of your property standings. Contact us today to get started with a consultation.