What reports to ask your property management company

Homeowners and real estate investors often find it challenging to stay on top of their real estate portfolios. However, it's essential for property owners to know how much their property is increasing/decreasing in value, how much income it is generating, and so on. For these tasks, most property owners rely on property management companies and the reports they generate.

Many homeowners aren't sure about what reports to ask for from their property managers. In this guide, we have discussed the indispensable areas of property management reports. You can study and request reports using this guide as a reference.

Real estate investors and rental property owners rely on property management reports to make informed decisions about their properties. Comprehensive reports reveal a lot about the profitability of your holdings and help uncover ways to increase profits.

Creating property management reports is among the many professional responsibilities of a property management company.

Income Statement

The first and most important thing to know about a property is how much money it is making and how much you are spending. Any reliable property manager will provide a monthly income statement report that has a detailed section on income and expenses. It includes:

• The sources of income of a property, such as rental income, washer/dryer income, etc.

• Expenses on the property, such as repairs, cleaning, maintenance, etc.

• Fees charged in accordance with your contract

• The total revenue/loss the property is generating (Income – Expense)

An income statement is the best way to determine whether your properties are profitable month over month. The income and expense report represent your cashflows for the property before mortgage payments. This is the first thing to ask for when dealing with a property management report.

Property statement

A property statement shows the flow of cash for a property. It includes your property’s beginning cash balance, cash flows in, cash flows out, adjustments and ending cash balance that is available for you. It will have the same items as the income statement but also includes any owner draws from the property and any deposits held by the property manager.

Budget versus Actual

Budget versus actual report can be a stand-alone statement or be provided as part of your income statement. This report compares what you expected the property to do versus the actual result. Not all property managers will provide a budget, especially if it’s the first year of managing the property. The property management company will assess a property for the typical costs that it incurs in a year. A property that has been under their management will have historical data that they can use in determining the budget.

Account ledger report

An account ledger report details every credit and debit transaction associated with your properties. It's a comprehensive report on every single transaction. Unlike income and expense reports, account ledger reports don't focus on the overall profit or loss. Instead, it gives you a database of every dollar you have spent or received in connection to your properties.

Account ledger reports are essential for diving into the details of your numbers. If your properties aren't yielding profits at a desirable rate, examining the account ledger report can give you an idea of where all the money is going. You should always ask for account ledger reports from your property management company.