Rental income is any revenue generated from your leased properties, including commercial or other investment properties. Therefore, a rental income statement helps you track your rental income and finances. This can help you manage your investments by staying on track with bookkeeping and expenses. Find out more about rental income statements and how an Aurora property management company can help.
About rental income statements
A rental income statement is a worksheet that is designed to keep track of spending or income for investment properties. Typically, up to five owned locations can be included in each statement. With income statements, you can locate specific transactions in each section on a month-to-month basis. Yearly gross and net income and expenses are also shown.
Tracking rental finances is simple since each itemized category is clearly shown. From utility payments to rental fees, income and expenses are easy to locate. This is exceptionally helpful for tax purposes and keeping your finances in order.
Benefits of creating a rental income statement
It’s good practice for property owners to generate a monthly income statement for each property. These statements are designed to keep you organized while ensuring no mistakes are present. After a few months of generated statements, it will be easy to spot any irregularities or unnecessary expenses. Income statements can help you keep expenses balanced, saving you more money on your investment.
Example of expenses
Income rental statements include a few types of expenses, as well. It’s important for property owners to stay up-to-date on operating expenses for tax purposes. Review the most common types of expenses included on the income statement below.
Advertising expenses: It’s common to have a budget for marketing, especially after tenants move out. Advertising expenses include ads, website hosting, and traditional marketing like flyers, billboards, and more.
Utilities: Renters are responsible for many of the utility payments. However, property owners most commonly pay for water, sewer, and trash services.
Insurance payments: Property insurance is necessary for any investment. This expense won’t be present if it’s included in your mortgage payment.
Maintenance services: Maintenance and repairs are also considered operating expenses. These common payments will definitely be included on the rental income sheet under expenses. Items like landscaping, snow removal, and pest control are also tax-deductible, so keep an eye on these types of expenses.
Property management services: Professional management service fees will also show up on your rental income and expense statements. For more information on possible property management fees, contact your property management company.
Accounting services: Sometimes you’ll need the help of an accountant to keep your finances in order. Accounting fees are deductible for investment properties, so this will be included under operating expenses.
Our Aurora property management company can assist with rental income statements and more. From single-family rental units to investment properties, we’ll help guide you through the Aurora real estate market. Contact us for the best tips for both rental and investment properties.