Understanding Your Owner Financial Statements
Owners Draws are sent out on the 9th of each month. The only time this does not happen is if the 9th lands on a weekend or holiday, in which case it will be dispersed on the next business day. If you have signed up for E-Check, this will be deposited into your account within 24 hours. If you would prefer paper checks, these are mailed on the same day draws are done and will be delivered by USPS First Class Mail.
*We recommend you do not count on the first month’s rent payment to make your mortgage payment. We also recommend keeping an equivalent of one month’s rent payment in a reserve of your own to provide stability during turnover or delinquent rent months.
There are three monthly financial reports that will show the balances of all fixed and variable transactions. These will be received through your Owner’s Portal. Examples of each statement are included in your Owners Binder under the “Financial Statements” tab.
1. Income Statement
The Income Statement reflects as a Profit and Loss Statement. It shows total income collected, and it show total expenses paid. At the bottom of the statement, it will reflect your Net Income. It categorizes this using the following columns:
- Selected Month: This will show income and expenses for the current month
- % of Selected Month: This shows the % of increase or decrease in cost compared to the prior month
- Year to Month End: This category will show the accumulated income and expenses for the year
- % of Year to Month End: This shows the % of increase or decrease in cost compared to the prior year
2. Cash Flow Statement
The Cash Flow Statement reflects total Operating Cash for the property. Similar to the Income Statement, it shows your total ending Cash Balance along with the total amount of Owners Draws issued to you.
3. Trust Account Balance
The Trust Account Balance Report shows the current security deposit balance that Real Property Management Solutions holds in trust for your tenants in accordance with ORS 863-025-0025(a).If you need this form to show to your CPA, please send us an email to Owner@realpmsolutions.com and we can send this, along with any other requested forms.
4. Year-End 1099
An IRS Form 1099MISC will be sent to you through your Owner Portal within 30 days of the end of each calendar year. This form is for your tax records and is used to help complete your tax filing for the previous year. We will also send an Income Statement 12 Month which will reflect year end totals. If your CPA or Accountant requires different forms, please let us know what forms they require, and we can generate them.
Fees and Charges
Monthly statements are available through your Owner Portal. These statements provide a quick way to understand how the rent money was applied. There are five general areas where rent money is applied:
1. Management Fee
The management fee is deducted from the rent received in accordance with your Management Agreement.
2. Maintenance Expenses
Annual or Recurring Maintenance expenses are itemized and deducted from the rent received in accordance with your Management Agreement.
3. Repair Expenses
- When a repair is requested by you or the tenant, that repair, if it is less than your Owner Reserve amount held by Real Property Management Solutions, will be deducted from that Owner Reserve. When rent is received, the repair amount invoiced by the vendor will then be deducted from the rent income in order to re-establish the Owner Reserve.
- If the repair is more than the Owner Reserve held by Real Property Management Solutions, it will be deducted from the rent received after we receive the invoice from the vendor who completed the repair. The exception to this is if you request to pay that repair invoice directly rather than take it from the rent revenue.
Any utility fees that are not paid by the tenant and are paid by Real Property Management Solutions on your behalf will be itemized and deducted from the rent received in accordance with your Management Agreement.
5. Other Expenses
Other expenses, such as the Tenant Placement Fee or Rent Ready Preparation Fee are also itemized and deducted in accordance with your Client Management Agreement.
Your “Owner Draw” is the amount paid to you after all expenses are deducted.