How to Easily Set Up Owner Statements to Keep Your Owners Happy
As a property manager, it is essential to keep accurate records of the financial activity of rental properties.
Owner statements are reports that summarize the income, expenses, and net cash flow of a rental property during a specific period.
Owner statements provide property managers with critical information on the financial health of a rental property.
These reports help managers track income and expenses, monitor cash flow, and provide a comprehensive report to property owners.
Effective management of owner statements is crucial to maintain the trust and satisfaction of property owners.
In this post, we will discuss how to easily set up owner statements to keep your owners happy as property managers.
We will cover the different types of owner statements, tips for creating effective statements, common mistakes to avoid, and best practices for managing statements.
By the end of this post, you will have a comprehensive understanding of how to manage owner statements effectively, resulting in happy property owners and thriving rental property businesses.
Understanding Owner Statements
Owner statements are reports that show the financial activity of a rental property during a specific period.
The statement typically includes a breakdown of the income generated by the property, the expenses incurred, and the net cash flow.
Owner statements typically contain the following elements:
- Income: This includes all rental income generated by the property during the specified period. It may also include any other income generated by the property, such as late fees or pet fees.
- Expenses: This includes all expenses incurred during the period, including repairs and maintenance, property taxes, insurance, and utilities. It may also include any other expenses such as property management fees or legal fees.
- Cash Flow: This shows the net cash flow of the property during the period, which is the difference between the income generated and the expenses incurred.
- Other Information: This may include any other relevant information, such as vacancy rates, tenant turnover, and any outstanding bills or payments.
There are different types of owner statements such as monthly owner statements, annual statements, and special purpose statements.
Monthly statements are generated on a monthly basis and provide a summary of the financial activity of the property for the previous month.
Annual statements are created once a year and give a summary of the financial activity of the property for the entire year.
Finally, special purpose statements are generated for a specific purpose, such as for tax purposes or to provide information to a lender. These statements may have different formatting or information requirements compared to regular monthly or annual statements.
Understanding the different types of owner statements and the elements they contain is essential for property managers to effectively set up and manage owner statements for their rental properties.
Setting Up Owner Statements
To set up owner statements, you need to choose the right software that will enable you to track rental income, expenses, and cash flow with ease.
This software should also have the ability to customize and automate the creation of owner statements. A great property management software option to consider is, you guessed it, DoorLoop.
We also have tons of reading material about different property management software companies so you can pick the one you truly match with, so read more about that here.
Once you have selected the appropriate software, the next step is to gather all necessary financial information.
This includes the total amount of rent collected, expenses incurred, and any other income generated by the property during the specified period.
Organizing financial information is crucial for creating accurate owner statements, so here are some of our tips:
- Categorize Income and Expenses: Categorizing income and expenses into different categories, such as rent income, maintenance expenses, and property taxes, allows for easier tracking and analysis.
- Identify Different Properties: If managing multiple rental properties, it is essential to identify each property and track its income and expenses separately.
- Create Accounts for Each Owner: Create individual accounts for each property owner to ensure accurate tracking of income and expenses for each property.
Creating Templates for Owner Statements
Creating templates for owner statements can save time and ensure consistency in formatting.
We advise always choosing a template design that is easy to read and visually appealing to the property owner. This should also be in line with the company's branding.
You should also, customize the template to include all necessary information, including the property owner's name and contact information, rental income, expenses incurred, and any other relevant details.
Finally, once the template is complete, save it for future use and updates. This will ensure consistency in formatting and save time when creating future statements.
Now that you know a little bit more about creating owner statements, we'll discuss some of our tips to make them more effective in the upcoming section.
Tips for Creating Effective Owner Statements
Effective owner statements are essential for maintaining a positive relationship with property owners.
Let's see how you can make these more effective!
Clear and Concise Information
Owner statements should provide clear and concise information that is easy for property owners to understand.
The use of charts and graphs can be helpful in presenting financial data. Additionally, property managers or property management companies should avoid using technical jargon or complicated financial terms that may confuse property owners.
Owner statements should be accurate and reflect the true financial situation of the property.
Ensure that all financial information, including rent, expenses, and other income, is recorded accurately to avoid discrepancies and disputes with owners.
You should aim to deliver owner statements on time, ideally within the first few days of the month following the reporting period.
Late delivery of a property management report can lead to frustration and mistrust with rental business owners.
If there are any delays in creating the owner statements, always communicate this to the property owners and provide an estimated delivery date.
Remember to always be transparent in your property management reports by providing detailed information about income and expenses incurred, such as providing an income and expense statement.
Property owners should be able to review the owner statements and understand the financial status of their property.
In addition, you should also be willing to answer any questions or concerns that property owners may have.
Owner statements should be professional in appearance and content. Ensure that the statements are well-formatted, with a clear and concise message.
The use of proper grammar and spelling is important in maintaining a professional image, so watch out for common typos and mistakes.
Common Mistakes to Avoid
While setting up owner statements is crucial, there are common mistakes that you should avoid to ensure the effectiveness of the statements, let's discuss some of these below.
Not Recording Expenses
Failing to record all expenses can lead to inaccurate owner statements. So always keep track of all expenses related to the property, including repairs, maintenance, insurance, and utilities.
Failing to Categorize Income and Expenses
Categorizing income and expenses correctly is essential for accurate reporting.
To avoid this, you should create categories for income and expenses and ensure that all transactions are correctly categorized.
Not Keeping Records up to Date
Keeping records up to date is essential for the accuracy of owner statements, so remember to maintain a system for recording all financial transactions, and they should be updated regularly.
Not Keeping Owners Informed
Keeping owners informed is crucial for maintaining a positive relationship with owners.
Ensure to communicate regularly with owners and provide updates on the financial status of their properties.
You should also be available to answer any questions or concerns that owners may have.
Not Providing Detailed Information
Owner statements should provide detailed information about the financial status of the property.
Property managers should include all income and expenses incurred during the reporting period and provide a breakdown of each category.
Additionally, they should be willing to explain any financial information that may be unclear to the owners.
Avoiding these common mistakes, can ensure that your owner statements are accurate, up to date, and provide owners with the information they need to make informed decisions about their properties.
Best Practices for Managing Owner Statements
To effectively manage owner statements, you should follow these best practices:
- Communicate Regularly: communication with owners is crucial for maintaining a positive relationship. Always update owners on any changes to their property, as well as the financial status of the property.
- Review Statements Regularly: Review owner statements regularly to ensure that all information is accurate and up to date. Regular reviews can help catch any errors or discrepancies early and avoid issues down the line.
- Be Prepared to Answer Questions: Owners may have questions about their statements or the financial status of their property and you should be available to answer these questions promptly and thoroughly.
- Address Issues Promptly: If an issue arises with an owner statement, you should address it promptly. Delaying or ignoring issues can lead to mistrust and damage the relationship between you and the owner.
- Keep Records Secure: Maintaining the security of owner records is critical. Ensure that all records are kept in a secure location and that only authorized individuals have access to them.
In conclusion, setting up an effective owner statement or rental owner cash report is essential for property managers to keep their owners happy.
Understanding the elements of owner statements, organizing information, and creating templates are all crucial steps in the process.
Additionally, you should always aim for clear, accurate, timely, transparent, and professional owner statements.
By implementing the strategies mentioned today, you can build trust and maintain a positive relationship with your owners.