As a property owner and supervisor, you know there are a lot of transactions every month. To stay on top of the movement of funds, it is important to keep meticulous records. This helps ensures effective property administration.
This is where an owner statement comes in. These reflect activities that occur during a set period, often each month, and are an important part of rental property management.
There are many different types of owner statements. They can have different layouts, styles, and included information. If you are unfamiliar with them, it can be difficult to know where to start.
The good news is that, once you understand owner statement basics, it will make recordkeeping a breeze. These tools will give you the peace of mind that you have accounted for every dollar and that your real estate investments are being managed well. Keep reading to find out more.
What Is an Owner Statement?
An owner statement, also known as an “owner report,” is a bookkeeping tool used for property portfolio management. It is an announcement that gives consistent reports on property standings.
The main purpose of an owner report is to track the cash flow of a property. It lays out expenses and revenue.
These include lease information, utilities paid by occupants, and administration payouts for upkeep. Owner reports also detail how much real cash remains in accounts related to the property.
These also are important real estate asset management tools. They can be useful for lease enforcement, lease renewals, and maintenance coordination. For instance, you can use them for record-keeping for determining if an owner has not paid the correct amount owed.
Basic Layout of Owner Statements
Owner statements should always have a preparation date. They should include the owner's name as indicated on the certificate of title, as well as contact information for the owner.
Next, the report should have a beginning statement balance, carried over from the previous statement. It should have a breakdown of income and expenses by property type. (Commercial properties are usually listed before residential ones.)
Expenses include things like turnover, maintenance, and repairs. Entries should have a description of activities performed and associated costs.
Owner draws, also known as "owner disbursements," are funds dispensed to the owner during the statement period. You should add these to the expenses column of the report.
Add rental income for each building, followed by a calculated net total. Calculate the ending portfolio balance by taking the beginning balance of each property, adding income, and subtracting expenses and any owner draws.
Learn More About Owner Statement Functions
Now that you have an idea of what functions an owner statement performs, you can use this tool to ensure your monthly revenue and expenses are in order. Consistency is important, and you can find templates for these forms online.
Pristine Property Management is a turnkey property management company operating in Miami, built on the philosophy that each property should be taken care of as if it were our own. We focus on lowering operating costs, identifying quality tenants, and limiting vacancies. Reach out to us today to learn more about our services and how they might benefit your business.