The average real estate investor in Missouri makes more than $107,000 a year. If you aren't making as much as you want to, you should look at your owner disbursements. Owner disbursements are the payments of your earnings from your rental properties.
Understanding your real estate payments can help you get more from your portfolio. Learn more about how to manage owner disbursements and their importance to your success.
1. Owner Disbursements Can Include Multiple Revenue Streams
Rent is the type of income that first comes to mind for an owner disbursement. Several other payment sources can be included, such as:
- Expense reimbursements
- Late fees
- Pet fees
- Application fees
- Security deposits
Tracking these categories will show you the value of each income stream.
2. You Can Choose How to Use Your Owner Disbursements
How you use the money from your owner disbursements is largely up to you. You need to track and report your rental income to the IRS, though. Some uses for real estate payments depend on your ownership structure.
Many landlords use their rental disbursements for working capital to avoid taking on debt.
You can reinvest your profits into your property for improvements and upgrades. It's also a good idea to set some money aside in an emergency fund.
Property owner income can help fund the purchase of new rental properties. You're in a stronger position to grow your portfolio.
You can use real estate payments to pay your property tax. Your accountant can help you find the best uses for your owner disbursements.
3. A Property Management Company Can Help Manage Owner Disbursements
Accurately tracking your property owner income and expenses is essential. Trying to manage the financial details on your own can be challenging, especially if you own multiple properties. The right property management company can help.
The property manager will send you owner statements with your rental disbursements. Their professional team ensures that all the relevant items are included. You can clearly see whether a property is profitable.
If a property has issues, you can identify them more easily and work to address them.
4. Understanding Your Owner Statements Is Key
Owner statements from your property management company will detail the income and expenses in your disbursements. Understanding what these statements tell you is essential for good financial management.
Owner statements include several parts:
- Income from rent and any other sources
- Expense summary
- Net income (income minus expenses)
- Information about your owner distributions
- Rental activity, like new tenants and lease renewals
A good property management firm will provide accurate, timely statements. Their team can explain anything that is unclear to you.
Get More from Your Owner Disbursements
How you track and manage your owner disbursements is a major factor in your success as a landlord. You can choose the most strategic way to use the funds. Working with a reputable property management company can help you follow these financial management tips.
Hunter Property Management has been serving our clients in Springfield, MO, for more than 34 years. Our client-first approach sets us apart. We're dedicated to giving you the highest possible return on your investment while providing a positive experience.
Schedule a consultation with Hunter Property Management today to learn how our people-driven culture can help you get more from your properties.
