There is a right and a wrong way to approach owner statements.
The wrong way is to assume their sole purpose is tax compliance and landlord documentation. The right way to approach owner statements is to remember that they are an asset for your real estate business and that close financial oversight can help you keep control of your finances in the long run.
Here are five ways you can improve your owner statements for your Charlottesville properties.
1. Improve the Detail for Clear Owner Reports
Owner statements should provide clear information, but they must also be comprehensive. If yours seem sparse, now is the time to add the missing detail. Owner statements should include:
- Itemized information on all income sources
- An itemized list of all expenses
- Descriptions for each entry where the information isn't self-explanatory
This helps improve transparency and makes it easier for you to delegate financial management to someone else. It also means you can drill down into the details if the headline figures aren't to your liking.
2. Use the Latest Technology
If you are making owner statements by hand or using spreadsheets, now is the time to upgrade to a more modern solution. Financial management software can make it easier to look after your finances and improve the accuracy of your data. Choose a solution that:
- Fits your budget
- Tracks income and expenses
- Allows you to run high-level reports
It should also give you real-time visibility of your finances and be accessible from anywhere. That makes it easy to assign financial tasks to someone else on your team.
3. Be Consistent
If you aren't using software to manage your owner statements, you must use a template.
A template can ensure that all your records are identical in format and the information you keep is consistent. It will also ensure that you have a more streamlined process when entering data and producing reports.
4. Use Reports to Compare Periods
Owner statements are most valuable when they tell you where you are headed, so make sure you have reports that allow you to compare one financial period with another. It will help you gain insights such as:
- Current market trends
- Spending performance
- Income trends
It will give you insights into potential opportunities. And it will help you spot problems before they escalate.
5. Improving Communication With Visuals
Remember that owner statements don't have to involve large lists of numbers. Instead, use charts and graphs.
Making the data more visually appealing will help you communicate it, interpret it, and spot ongoing trends. Plus, a regular review of these graphs will help you make decisions about your real estate investments.
Improving Your Owner Statements for Your Real Estate Business
Don't fall into the trap of thinking owner statements are a low-priority task, ready to be ticked off your list and forgotten. These financial records are crucial for a thriving real estate business, so use these five tips to help you get the most from them.
PMI Commonwealth is an experienced property management team that can help you get the most from your investment. Our attention to detail and commitment to increasing the value of your asset set us apart from our Charlottesville real estate teams. Discover more about our services here.
