Choosing to work with a property management company is one of the best decisions a wise property owner can make to secure his free time and his investment. However, he still has to be kept informed about the property’s performance. A property management report is the best way in which the landlord is kept in the loop with the management of their property, and it can also make the landlord’s duties easier. They give away detailed information on finances, maintenance, general duties, and statements performed. It will help the landlord oversee its property portfolio without being involved in the day-to-day workload.
Let’s break down what areas a property management report includes.
Income and expense statement
Any investor takes up a venture for a single primary reason: money. This financial statement is the first thing they look at to see how much money their property is making. It breaks down the finances, highlighting them in a line-by-line categorized list, overseeing every income and expense, and ultimately helping the landlord understand the cash flow. There can be multiple categories, but it typically includes all the income sources, an overview of expenses with their categories, and profit.
A more extensive property portfolio is the joy and pride of any real estate investor. This area in the landlord’s property management portfolio is included if they own multiple properties. The operating statement is meant to give a general understanding of how the properties work together to establish the overall performance of the real estate portfolio, informing about its financial health.
This statement clears the air on the portfolio’s strong points as well as weaker ones, which should be considered areas for improvement.
Also known as the owner cash report, this one is similar to the income and expense statement, with the difference that the owner statement includes beginning and ending balances.
The property management overseeing the real estate portfolio should give out each month this type of statement, informing the owner with details on how the investment is performing from a financial point of view. What the landlord will find here generally includes maintenance fees, inventory calls, management fees, utilities, categorized income, and beginning and ending balance sheets.
Account ledger report
This is an extremely important report, and it highlights all the transactions on the property’s ledger. This report can be made for a single property, or the property manager can choose to make it for the entire portfolio. On each transaction, the landlord will be able to see its date, description, category, and amount. This makes it easy for the landlord to request financial details from a specific date or a specific property.
Additional owner reports
As there is no one size fits all, each landlord can request property manager reports specific to their situation. These reports change based on the type of property, number of properties, number of tenants, location, etc. The landlord can choose to request reports only for maintenance, vacant property, tenant changes, other services, etc. It constantly changes depending on what they want to have an overview.
Accounts payable report
This report showcases all payments made during the reporting period, including payments regarding debts or financial obligations.
Copy of monthly bank statements with reconciliations
A bank reconciliation statement is a report that is made to compare the balance sheet to the bank statement, determining if changes are needed to the account. It also helps the landlord understand if the cash flow has been registered correctly everywhere.
What is not included
Above, we can observe what is typically included in a property management report. Other things can be added at the request of the landlord, such as tenant screening records, vendor ledger, rent roll, delinquent tenant reports, etc.
While they’re a great asset, properties can be hard to overview. Not having a deep understanding could lead to various bad decisions. This report helps can be made monthly, quarterly, or yearly. How frequently they’re made depends on the landlord’s preferences as well as the portfolio’s size and how detailed it needs to be.
It also encourages a transparent relationship between the owner and the property management companies. It’s crucial that the manager carefully builds this report with the most accurate, qualitative information possible so that the manager can efficiently evaluate the performance of their property.