Property Management Financial Reporting for Stronger Investments

Here’s all you need to know about Property Management Financial Reporting — Oprah signs her own checks. Business Insider reports “Oprah always signs all of her checks. That might not sound like a big deal if you’re a sole proprietor or run a typical small business of 10 or fewer people. But this was Oprah! She didn’t let anyone else sign her checks; she knew every single nickel and dime that went out the door.”

Bill Gates, Madonna and Warren Buffett share Oprah’s obsession for financial reporting details. Why? Because at its core, commercial success depends on knowing the details. It is the habit of monitoring those details that made these entertainers and entrepreneurs wealthy. Check signing and attention to financial reporting is only the vehicle they used. They hover over their assets like nervous soccer moms.

Financial reporting with a property management company

Property Management Financial Reporting

Financial reporter researching the market


Purchasing your first property is a huge investment. You may be buying for several reasons, be it a long-term or short-term investment, you need to do your research. It’s easy to “fall in love” with a property based on appearances, neighborhood, or maybe your childhood home is up for sale.  You may have fond memories, but is this really the best property for the income stream you want? In conclusion, thinking with your head vs. your heart is a smarter perspective.

Property Performance

Now is the time to do a proper pro forma on any property you are considering. A pro forma is an estimate of how well you think the property will perform over a given period of time. It’s crucial that this task is done properly because all aspects of future financial reports are built upon this step.  How much risk are you willing to take? This will take the guesswork out of it so you can decide whether this investment is right for you. We can assist with this step and offer insight to assure you have a good viable investment property. Put our leadership teams’ 55 years of combined experience to work for you!

Once the purchase is made and you have one or more investment properties, it’s crucial to track the financial performance. A range of property management financial reporting options is available for you to choose from. While some investors dig into the details of their properties independently, others enjoy a little help. We’re able to produce reports based on your needs at a high level and as detailed or basic as you like. Bottom Line Property Management wants to help you succeed with your property investment!

Reporter analyzing financial performanceThere are two reports in property management that track your properties performance: The Rent Roll and the Profit and Loss Report.

The Rent Roll Report

The Rent Roll report is essentially a ‘snapshot’ on how the property is performing at a certain moment in time. The report can be customized to pull together the data most helpful to your needs. Most rent roll reports contain the following: unit address, resident name, amount of rent, amount of security deposit, amount of rent past due, and the lease end date. It’s a lot of data but it’s essential to have all metrics to analyze the financial health of your investment. A quick review of the data will tell you how much income you are scheduled to receive in a month, the overall occupancy rate, current residents who owe any back rent and lets you keep an eye on lease expiration dates.

The Profit and Loss Report

A Profit and Loss Report is just that, it’s a report that will show you the income and expenses from a property over a period of time. This report will show the owner whether this property is making money or not. While it is tempting to judge the profitability (or lack of) over a short period of time (say, 1-6 months), the best way to track properties is by looking at historical data over a course of a year or several. Short term profit and loss statements should not be disregarded entirely. Please keep these in the context of your long-term financial goals of ownership.

We want to help you! Bottom Line Property Management has several different owner reports available. These owner reports help our clients understand their finances. We know that not everyone interprets data the same, so we’ve put together report options to help you know where you stand. From simple reports to a more detailed report-we want you comfortable with the details. As our client, you will receive a monthly owner statement that is posted on your personal Owner Portal every beginning month. You’ll get 24/7 easy access to your online portal to prior months statements as well as information like accounts payable invoices and your live portfolio balance.

Calculate your finances to budget properly

Creating a Budget

Yes, financial reporting can seem overwhelming at times! It’s essential to be properly informed and know how to act with that information. Then you can make the best-informed decisions. Before you purchased your property, you did a Pro Forma. Now that you have the property, it’s crucial you create a budget.

A budget will help you track your income and expenses. It will also forecast what you can expect to make or lose each year based on your assumptions. You can adjust these assumptions annually so they remain accurate.

Signing a contract to sell a property

Plan Accordingly

With any investment, there is a time to buy and a time to sell. Consider your exit strategy before you invest. How long are you planning to own this property? Are you going to sell it and buy others? Sell it and retire? Sell it while prices are high? While it’s important to acquire a property at the right time and the right price, you should also plan your exit accordingly.  

The market cycle in any given market can supply good indicators on a good time to buy and sell. How do you know where your investment lies in this cycle? We can help take the guesswork out of this as well. Our team is well versed in market conditions and can advise you.

Our core values are customer focus, dedication, and excellence. Call us today to see how we live these values in our Bottom Line Process. Learn more about how this process has helped us to serve our clients and streamline the complicated world of property management.

Whether you have an Oprah-sized budget or starting with your first investment, we know that your investment is unique to your vision. Our Property Management team is here to help you on this journey and protect your bottom line.

Your investment-our priority!

Budget Categories to Include:

Rental Income

The key to a good financial investment formula is a strong rental income number. The keys to obtaining a strong rental income: Team up with a reputable and experienced property manager. Bottom Line Property Management is the leader among property management companies in the Charlotte and surrounding market. We utilize our experience and expertise to give a qualified perspective to analyze market rents so we can establish the right rental rate for the market. We strive to maintain our 98% collection rate monthly! Then, track your rental income and use this historical information to update your budget for future rental income collections.


Rental income is obviously important, but so is having a good understanding of expenses and controlling them. Expect to spend 40-50% of your rental income on expenses. Of course, this number will vary depending on the properties you own. Single-family homes vs. multi-family homes, old vs. new, deferred maintenance vs. newly updated—these are factors in what expenses you can plan for. Many investors make the mistake of not properly planning for expenses because most items in a home can be used for long periods of time (such as a furnace).

Initially, if you have an updated property, your expenses can be as low as 15-20%. This is one reason many investors prefer newer or updated properties. But to be prepared for the future, it’s important to have money in reserve for larger expenses.

Net Operating Income

The net operating income on your property is the difference between your rental income and your expenses. It’s important to note that this does not include your mortgage. Obviously, it’s important to factor your mortgage cost into your overall budget, but it is not to be included in monthly expenses.  Over time, your financial reporting will help you determine the net income on your property(ties). Are you getting a good return on your investment? Good! Are you not? Then it’s time to re-visit your initial pro forma assumptions and see if they are in line with the current market situation.

This is where teaming up with a professional property management company is a wise choice! You can reach out to our broker or leadership team at any time and we’ll brainstorm with you on why a property might not be producing the income you had expected.

The success of an investment property is driven by several factors. Financial reporting and analyzing these reports are great tools to keep you informed on your investment.

Estimated Average Lifetime of Items that Commonly Need Replacement:

Roof – every 20-30 years
HVAC – every 15 years
Water Heater – every 10 years
Siding – every 25 years
Driveway – every 30 years
Interior painting – every 6-8 years or more
Flooring – every 8-10 years

Example: A new asphalt shingled roof for a typical 2,000 square feet single-story ranch house can range in price from $8,500-$16,500 installed. All of these items are expensive, so budget 1-2% of the value of your home for long term items like this.

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