46 cents of every dollar of rental income goes towards mortgages. Only seven cents is returned as profit.
Preparing for the future is key to maximizing this number. Landlords don't have a crystal ball, but they have something better.
Owner statements are reports that show how your property has been performing. They provide information you can use to make it perform better than ever.
What should you focus on when analyzing them? Read on to learn four crucial owner statements insights in Lynwood, WA.
1. Financial Reporting
An owner statement is one of your most important documents regarding landlord accounting. It provides a broad overview of your property's financial health.
You'll get information about all your earnings. It'll also outline your expenses, such as:
- Maintenance
- Utilities
- Property management fees
The final major calculation is net cash flow. It subtracts expenses from income.
These numbers let you know how much you're earning. Comparing them to previous owner statements shows if your property is becoming more or less profitable. You'll also see where most of your money is going and can find ways to cut expenses.
The data in owner statements is also essential for filing taxes. You need exact numbers of what you earned to get all the deductions you apply for and avoid penalties.
2. Property Performance Indicators
Finances are only one part of determining a property's health. You need a full investment analysis to tell you everything about it.
There are various key performance indicators to look at in an owner statement. Other than net income, these may include:
- Occupancy rate
- Capitalization rate
- Expense management efficiency
- Rental income trends
All of these metrics have a great deal to say about your property. They should be part of your statement overview process.
Occupancy rates indicate the demand for your property and the success of your marketing efforts. Analyzing rental income trends shows if your rates have increased or decreased over time. Looking at the expense management information can show you ways to cut costs.
3. Maintenance and Improvement Planning
financial reporting from an owner statement does more than show you how much money you're making. It helps you notice where you're spending too much. If you keep paying for repairs on a utility such as the AC in a unit, it may be time to replace it.
The owner statement also helps you create an effective budget for the future. What improvements would benefit the property in the long term? What capital expenditures should you consider?
4. Maintaining Market Alignment
Owner statements protect your property and help you make decisions that will keep it profitable. They also help you maximize the present moment.
The local rental market changes on a dime, but your owner statement can help you keep up. Knowing about these changes helps set the right rental rates and attract more tenants.
Let Property Managers Analyze Your Owner Statements
Owner statements are essential documents for property owners. They provide essential financial reports, reveal key performance indicators, help plan maintenance and improvements, and align you with the current market.
PMI Brewder Realty is a full-service real estate asset management company. We set ourselves apart through effective communication, careful attention to detail, and a focus on helping you achieve your investment goals. Contact us to schedule a consultation or a free rental analysis today.
