Like any business, it's important to be informed about your rental property’s financial health. Property managers should be able to provide landlords with several specific reports every month. Though, some reports are more significant.
Below are the three reports you should ask your property managers for, every month.
As one of the most critical monthly reports, landlords should request rent collection and income reports. It provides a clear overview of which tenants have paid, and more importantly, who is late on rent and who may have any outstanding balances owed. Without access to this information, landlords with an extensive portfolio may unknowingly experience financial shortfalls, especially if multiple tenants fall behind on their rent. A good property manager should also be able to point out trends within the report. Using this information, you can then determine if you want to assist them if they’re otherwise high quality tenants, or opt to not renew their lease.
Aside from tracking payments, this report should include details on any fees accrued by tenants, such as late fees, bounced checks, or if partial payment was made. For landlords relying on rental income to cover for mortgage payments, being aware of potential income setbacks can prevent financial stress and keep your investment property running efficiently.
Like many businesses, investment properties will have expenses. While tracking rental income is important, it's equally important to keep track of your rental property’s expenses. An expense report should provide a detailed breakdown of any costs related to the property. This should include costs for routine maintenance, vacancy preparation, emergency repairs, and more. A property that is well maintained should have predictable expenses, meaning any spike in costs should be closely examined.
A comprehensive expense report can also help landlords budget for future investments, upgrading the rental property. As well as allowing you to compare monthly expenses over time to discover new trends. As an example, seeing a spike in plumbing repairs or blockages can be the result of roots growing in the sewage drain, or older buildings, it can be a sign that the plumbing needs to be replaced. If not looked into, it may result in an expensive emergency repair and thousands of dollars in damages.
Having a high occupancy rate is the best way to maintain a steady rental income. This makes the occupancy/vacancy report a crucial document for landlords. This report details which units or homes are currently occupied, which lease agreements are expiring soon, and what, if any units are vacant. Without this information, landlords risk being caught off guard if a tenant moves out unexpectedly, or new leases being delayed and not signed on time.
Additionally, this report is especially valuable in assessing your property manager’s effectiveness. If units are vacant for extended periods, it may be the result of poor
marketing, rent assessment or lack of proactive tenant retention strategies. By monitoring this report closely, it can not only help you stay afloat for unforeseen financial issues, it can help you understand if your
property management company is right for you.
While a good property manager should provide you with more than just these three reports, these help landlords stay prepared, maintain cash flow, control expenses, and reduce overall maintenance. If you’re looking to be better informed about your investment property or you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our
Owner Application online.
