Knowledge is power.
As a property owner, you need to have up-to-date financial information on your rental properties.
It’s up to the property management company to provide that information.
Not having accurate financial details is like walking through a house of mirrors.
You do see a reflection of yourself, but some of the mirrors are curved.
Some show you as grotesquely thin or fat depending upon how the mirrors are misshaped.
In order to get an accurate visual representation of yourself, you need to look at a mirror that isn’t warped.
In order to get an accurate financial representation of your rental properties, you need to get accurate statements that show all the income and expense information.
This article shows you what information is critical to make sure you are getting an accurate picture of what is going on financial with your rental properties.
Monthly Itemized Statements
For starters, you must receive itemized monthly statements every single month.
One owner who recently hired my company to manager their properties told me they never received any type of itemized statement from her management company.
Big red flag.
The first question that comes to mind is if that company was stealing from her. Clearly, she didn’t have any way to know.
Preparing itemized monthly statements is one of the most time consuming tasks that we perform for our clients.
It take several people working days straight to get this done.
But it’s absolutely essential.
Critical Information that MUST be on Every Itemized Monthly Statement
Your monthly itemized statement should clearly state the period covered, all income collected, all expenses paid, and the specific OKC rental properties in question.
You should receive copies of itemized invoices that provide a clear break down of what was done, and how much was charged for labor and materials.
You should be receiving those monthly statements at roughly the same time every month.
The cut-off date for our statements is the 10th of the month. That means that any income and expense items from the 11th of the prior month to the
We send an email to our clients between the 11th and 13th of the month that has a copy of their statement.
At the same time, we direct deposit their rents to the bank account they have provided to us.
So here are some guidelines I would recommend:
- No matter who is managing your properties, those itemized monthly statements should come to you like clock work every single month.
- In addition, you should have a clear expectation from your manager as to when the statement will be provided.
- The management company should send rents to the owner at the same time as the itemized monthly statement is delivered.
- Your the property management company should make direct deposits of the rents into your bank account to avoid any delays in getting your funds.
Your property management company should definitely be keeping all of your information in some sort of financial database.
I’ll give you a perfect example of why this is.
We had a client contact us for all of his information for 2013.
At the date of this writing, that’s five years ago.
He needed the information to present to the IRS.
Because we had all of his information in our database from day one, it was very easy to send him reports for every single month of that year.
And, the income matched to the penny with the 1099 we sent him for that year.
Annual Itemized Statement
You should also receive an annual itemized statement corresponding to your tax year calendar from your property management company.
It should tabulate all income and expenses on a per property basis for the calendar year.
That way, you can provide this statement directly to your tax accountant.
You will not have to go through all your monthly statements and add things up yourself, which would be a pain.
Because we keep all of our client’s financial information for each property in a financial database, it’s easy for us to create an simple profit and loss statement for the year for each of our clients.
You can simply hand that report to your accountant to prepare your taxes for the year.
Have a Designated contact at Your Property Management Company
You should also have a contact identified at your property management company who handles questions about the monthly statement.
For example, it’s very unlikely the person who handles leasing is going to be best one to answer a question about something on your statement.
What if You Can’t Wait for the Itemized Monthly Statement?
For my clients who want access to their financial information 24/7, we have our client portal.
It has any information that we have input into our database.
So if you are wondering if the rent got paid yet for your property, you can just go to the portal to check it out.
To find out more about the portal, click here now.
If you have questions about OKC property management, call OKC Home Realty Services at 405-232-5800.
Follow Scott Nachatilo on Facebook!