Owning rental properties is a classic method of real estate investment. Using this approach, investors can generate significant wealth by renting out their properties.
Plenty of Charlotte, North Carolina, investors use this tactic. Recent studies have found that 41% of Charlotte households are renter-occupied.
If you own any of these renter-occupied homes, the IRS wants to know about it. That's why owner statements and reporting are so crucial for landlords.
These statements play a critical role in your property accounting. They help you summarize several facets of your rental property's finances. You can use this information to file accurate tax reports to the IRS.
If you're unfamiliar with these statements, don't worry! We'll explain how they work in the guide below.
What To Include in Owner Statements and Reporting
An owner statement serves as a summary of critical items that owners should track. This way, you can accurately report both your rental expenses and rental income.
Owner reports often include the following items:
- list of current tenants
- lease dates
- rent paid and owing
- repair costs
- maintenance costs and payments made
- bank statements
- income statements
- balance sheets
Your owner statement may exclude or include some of these items based on how you receive payment. Your agreement terms with tenants may also affect how you compile these statements.
How to Create the Best Owner Statements and Reporting
As you can see, owner statements can include a lot of information. Managing and compiling that data can be a time-consuming project.
Fortunately, there are several ways to mitigate this task and make it easier! All it takes is some discipline and consistency.
First, set a time period for reporting. Do you want to do this monthly? Quarterly?
Remember, every time period matters when you're building value. Likewise, keep consistent deadlines for reporting.
This step requires consistency from your renters. Ensure tenants pay their rent on time and that you've received all monthly invoices. This approach helps you keep your monthly reports accurate.
Finally, choose a specific time to send out your reports. For example, you may do this on the 15th of each month. This set time gives you a chance to manage payments and fees.
Working With a Property Management Service
Sometimes, you'll encounter assets that can be tedious to manage alone. For example, many owners struggle with prepaid rent accounting and its place in their income tax.
If these questions concern you, consider working with a property management service! These services take much of the responsibility of landowners from their shoulders.
Property management services often collect the key information you need for your owner statements. They can even handle some trickier funds, such as prepaid rent accounting. If you're uncomfortable managing all of your finances alone, these services can be a lifesaver!
For information on reducing the tax burden on investment property in North Carolina, follow this link. https://carolinaspropertymanagement.com/blog/how-to-lower-investment-property-taxes-in-north-carolina
Consider Working With Us
As you can see, owner statements and reporting require significant time and diligence to compile. Doing this alone can be intimidating, especially for new rental property owners.
Luckily, you don't have to do this alone! Instead, you can work with us to manage your rental expenses and income.
We provide top-notch property management services to property owners throughout the Carolinas. We've helped many Charlotte landlords handle their data and keep accurate records.
So, why hesitate? Contact us today to receive the help you need!
To learn how to use your rental analysis to save money, please click here.
