The Real Estate Encyclopedia
What Is An Owner’s Financial Statement?
Category - Real Estate Information Sources - General Real Estate Information

If a property manager handles a property owner’s rental properties, the manager is responsible for sending the owner a monthly report of income and expenses.  Quarterly, semiannual or annual profit and loss statements are compiled from these monthly reports.  They assist the owner in reporting the information for tax purposes.  These financial statements are also required as supporting documentation, when the property owner sells the property to another investor. 


The financial statements help the owner analyze how the property was managed and decide any changes to be made, as well as to make projections for the following year.  On the profit side, only the mortgage payment should be deducted as an expense.  On the loss statement, the entire debt service is applied. 


The profit and loss statements should be compared to the operating budget each year.  Such comparison measures the performance of the property manager and determines the future changes. 

Home Ownership Questions - Lease & Renting FAQ's
Real Estate Information Sources - General Real Estate Information
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