Nicknamed 'The Biggest Little City in the World', Reno holds much appeal for property investors. The area boasts a thriving economy and shows significant growth in the manufacturing, transport, and construction sectors.
These factors make Reno an attractive prospect for those seeking employment and prosperity. As a prospective landlord, you can play an important role in the city's growth by catering to these new residents.
Owning rental units involves more than providing housing for a growing population. You must also familiarize yourself with the intricacies of property management.
Get started by learning more about the importance of owner statements.
About Financial Reports for Landlords
Property managers help ensure accurate landlord accounting procedures by providing property owners with a range of reports every month. Income statements are one of the most important of these.
They include detailed information about all the money coming into your rental business as well as your expenses. Owner statements provide a summary of these transactions.
These real estate statements allow you to easily gauge how well your properties are performing.
What's Included in Owner Statements?
Although they might vary from property manager to property manager, owner statements all have three main sections. These are:
Income
This portion of the owner statement is vital for rental income tracking. It details all the rent payments for the month, allowing you to identify outstanding amounts at a glance.
It's also a handy tool for discovering habitual late payers and poor-performing properties.
Pet deposits, security deposits, laundry fees, parking fees, and late penalties are also included in this section.
Operating Costs
Operating costs refer to all the expenses that your property manager pays on your behalf. Some typical expenses include:
- Property management fees
- Property taxes
- Maintenance and repair costs
- Utilities
- Insurance premiums
- Marketing costs
The funds for these may come from rent owed or from a fund you've set up for the purpose. Many of these costs are tax-deductible, so be sure to forward this information to your tax professional during tax season.
Net Operating Income
Net operating income compares your income with your expenses and helps you identify profits or losses associated with your rental business. You calculate NOI by deducting your expenses from your income.
If you arrive at a negative amount, you've got some decisions to make. It may be time to:
- Increase your rent prices
- Work with your property manager to reduce costs
- Consider selling poor-performing properties.
Your lender will study this part of your owner statement if you apply for a second mortgage. They use it to calculate your Debt Service Ratio and Cap Rate.
Make the Most of Owner Reports
An experienced property manager can help you maximize the information contained in your owner statements. They can help you identify areas for cost savings, assist with rental valuations to maximize your profits and guide your real estate strategy.
PMI Diversified Properties is owned and operated by one of Reno's most experienced brokers. We can assist you with a full range of property services and more.
Browse our blog for more property management tips and find out how we can help you thrive as a Reno, NV, landlord.
