The purpose of monthly property management reports is to allow property owners to understand what is going on with their properties. They give them the kind of visibility that enables them to make good decisions to grow their property portfolios and help them to avoid unnecessary losses and expenses. Landlords need to know what is included in these reports, how often they will receive them and what they can learn from them.
What should a monthly property management report cover?
Typically, property management companies will provide the following types of reports to landlords.
- An income and expense report
- Owner statement
- An operating statement
- An account ledger report
An income and expense report gives details of all income and outgoing expenses. The expenses are deducted from the income. Owner disbursements or owner draws are deducted as an expense as the funds are no longer available as income for use on the property.
To be on top of your financial reporting, you must consult with experts and avail their property management services. For example, If you own an investment property in Colorado Springs or any other nearby area, consult a property management specialist. Experienced property managers know the importance of financial reporting, so they offer income and expense reports. Giving accurate reports to clients allows for putting in place processes that can save time and money so hiring an expert should be a top priority for you.
An owner statement is similar to an income and expense report, but it typically includes a beginning balance, categorized income, categorized expenses and an ending balance. From the ending balance, the owner draws and any reserve target is deducted to show the available balance. A reserve target is funds held for unexpected expenses. The available balance is the next owner statement beginning balance.
An operating statement provides a clear bird’s eye view of how all properties that are part of an investment portfolio are performing. Pulling an operating statement for individual properties is also possible.
An account ledger report details all the debit and credit transactions posted in the property ledger. It is organized by date and account type to enable more detailed analysis.
Plan a regular maintenance schedule
Budgeting and forecasting are important, particularly when it comes to unexpected costs. This is where the monthly property management report is beneficial. It can help with the planning of maintenance and setting aside funds for unexpected expenses.
Properties are valuable assets and can quickly deteriorate without consistent attention and care. Preventative maintenance checks can help with avoiding more expensive problems down the road. Property managers will make sure the infrastructure of the property stays in good condition, and repairs are made when necessary. They may also suggest what property upgrades could pay off over the long run.
Track the data
Landlords can assess the financial performance of their properties with the data provided in the property management reports. They can benchmark actual performance against expected performance and compare estimated budgets against actual amounts spent. They can take corrective actions if necessary to save more money and achieve more profitability.
Enhance visibility into properties
Monthly property management reports help landlords to gain visibility into what is happening with their properties. It is difficult for them to remain hands-on if they have many properties in their portfolios. The monthly report can give them insight into whether their properties are performing relative to the budget. If the budget is not being met, property managers will be able to give them good advice so they can adjust expenditures.
Identify fraudulent activities before they become substantial
It is easy for mistakes to creep in but reviewing monthly property management reports enables property owners to recognize any trends that could indicate fraudulent activities. Cyber fraud is becoming more and more evident, and landlords need to be aware of it. Uncovering fraud by discovering certain trends could prevent substantial financial losses over the long term.
Plan financial goals
Planning financial goals will involve having a comprehensive picture of current finances and the strategies to use to meet goals. Proper planning allows landlords to make the most of their properties as assets. It can give them the confidence to deal with any bumps along the way. Having concrete goals means they can identify and take the next steps.
A sense of what is coming in and going out is the key to planning financial goals. Seeing exactly where money is going helps with setting immediate, short term and long-term plans. An immediate goal may be to put away some cash for emergency expenses. Long-term goals may include being able to add new properties to their portfolios, expand into new markets, or pay off their mortgages on existing units.
Identify trends & opportunities
Monthly property management reports can provide valuable insight into the performance of a portfolio or project and help identify trends and opportunities. Reports can give property managers and owners up-to-date information on how the property is doing (both in terms of operational performance and financial/statistical analysis), which can help them to make informed decisions about how to maximize potential in their portfolios.
By providing accurate data, monthly reports are essential tools that allow property owners or managers to effectively monitor their investments or projects over both shorter time spans (monthly) and longer time spans (annually). Accurate data is essential for making strategic decisions regarding investments – with monthly management reports investors have access to up-to-date figures that provide an accurate snapshot of the current state of their portfolios which can then be used as a base for more informed decision-making going forward.
As a landlord with a number of investment properties, viewing monthly property management reports is essential. They provide a window into income, expenses and overall trending ROI performance. Not having these reports to view could result in them making uninformed decisions and losing money. Paying attention to the reports can have the opposite effect. It gives them the ability to make informed decisions and benefit from their property investments.