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ZipRecruiter.com reports that landlords in Utah earn an average annual income of $75,449. Provo, UT, landlords make even more: an average of $88,675.
If you're a Provo landlord and want to earn good rental income, you must first understand owner statements. Otherwise, you may have trouble managing landlord finances.
Don't worry; PMI Made Simple's real estate management experts are here to help. Read on as we've discussed the critical elements of owner statements you must know as a Provo landlord.
1. Gross Rental Income Reports
One of the first items on your owner statements is rental income, the payment your tenants make to use your property. However, you may also see other rent-related fees, such as late rent charges. It may also include pet rent if you allow pets on your property.
2. Property Expenses
When you rent out your Provo, UT, property, you won't just earn income but also incur expenses along the way. If you've teamed up with a reliable property management company, they'll itemize all these costs as part of your owner's financial statements.
According to Bankrate, landlords have to account for at least six "hidden" costs, including:
- State and municipal taxes (on top of your federal taxes)
- Utility bills, including the basics like electricity and water
- Legal, marketing, and administration fees
- Property maintenance and repairs
- Landlord insurance
- Vacancies
Property managers worth their salt will do everything they can to minimize vacancies. For example, they'll screen tenants thoroughly to reduce the risks of late payments, delinquencies, and evictions. They'll also implement programs aimed at boosting tenant satisfaction and lease renewals.
3. Outstanding Tenant Dues or Charges
Property managers often generate and issue owner statements annually. So, when you get yours for the year, you may see items representing unpaid rent or other fees for the current month.
4. Net Income Reports
Net income is whatever's left of the gross income after deducting rental expenses.
For example, suppose your monthly rental fee is $1,500, giving you a gross annual income of $18,000 per property. On the other hand, your rental property expenses total $6,000.
In that case, your property manager will report your net income as $12,000 and include detailed computations. They'll also provide property management tips and insights, such as lowering utility bills by upgrading to more energy-efficient appliances.
5. Rental Activity
Your property manager should also include a summary and analysis of your rental activity. For example, they may report about:
- Any new tenants
- Existing tenants who renewed their leases
- Renters who moved out (and why, if they gave a reason)
Along with those details are recommendations to improve the tenancy rate and minimize move-outs and vacancies. For instance, if you have a no-pet policy, they may suggest removing this to attract more long-term pet-owning tenants.
Always Review Owner Statements
Now that you know more about the critical elements of owner statements, you'll likely find it easier to understand them moving forward. However, if you're not getting these documents yearly because you don't have a property manager, consider partnering with us, PMI Made Simple.
We're a full-service property management company serving landlords throughout the Provo, UT, area. From marketing to tenant placement, rent collection, accounting, and yearly accurate reporting, you can rely on us for all these and more.
Get in touch with us today to request your free rental analysis!
