The purpose of this document is to give an overview of the Owners Statement that you will receive at the end of each reporting month. We have broken down the Owners Statement, giving a brief description of what activity would affect each item. It is our goal to provide you with highest level of service possible, so if at any time you have questions regarding your financial statements please contact either the accounting department or your property manager for assistance.
Beginning Bank Balance: This will be the balance in your account at the beginning of the reporting period. This amount should always equal the “Ending Bank Balance” from the previous month’s statement.
Income Rental Income: This is any money received related directly to the amount due each month by the resident for the rental of the property.
Less Concessions: If any agreements have been made with the resident regarding a decrease in rent, this is where that deduction will appear. Concessions can include, but are not limited to, giving the resident a deduction on rent as a move in special or a decrease in monthly rent for services performed at the property such as grounds keeping. When concessions are given to your resident, it decreases the monthly rental income.
Reletting Fees: If for any reason your resident breaks the lease agreement they signed prior to the end of the lease expiration date or if the resident does not give a proper written notice to vacate then a reletting fee is charged. As the resident repays these fees, it will show as income to you.
Damages: When a resident moves out of your property, your Property Manager performs a move out inspection. Any damages that were not reported at the time the resident moved in are charged back to the resident’s account. Examples of damages that could be found in the unit are holes in the walls, blinds needing replacement, or carpet/cleaning/replacement. In most cases, the security deposit will cover these charges and is applied to them as needed. When paid, either with the security deposit or by the tenant, it will show here on your statement as income to your property and used to offset the costs incurred to ready the property for the next tenant.
Electric/Water Recapture: Although we require your resident to setup utilities in their name prior to move in, sometimes there is an overlap in utility service dates. When a utility charge overlaps the move in date, we charge the utility usage for that time period back to the resident. When the resident pays the charges this will show as income and will offset the expense paid by you for the designated period.
Eviction Fee Reimbursement: In the event that we have to file eviction on your resident, the resident will be responsible to repay these costs. When paid by the resident it will appear as income to your property offsetting the expense you had to pay for the initial filing.
Non-Refundable Pet Deposit: Any resident that moves into your property with a pet is required to pay a pet deposit. Each deposit is broken down into two parts; one being refundable to the resident, and the other non-refundable. The non-refundable portion is kept in your owner bank account to offset the costs occurred at the time the resident moves out for carpet cleaning and deodorizing.
Other Income: During the application process of renting your property we require the applicant to pay a $100.00 hold fee which removes the property from the leasing market until the applicant is either approved or declined. If an applicant is approved, they have 24 hours from the time of approval to either accept or decline the property. Occasionally you will have a resident decline the property after that 24-hour period. When this occurs, they forfeit the hold fee and it is posted to this account as income to your property.
Unallocated Prepaid: This occurs when we receive money from your resident and there are no charges on their account to apply the payment. The system holds those funds as an “Unallocated prepaid”. When charges are posted to the resident’s account, such as rent, the software automatically looks for any “unallocated funds”. If there are any, it will automatically reduce those unallocated funds and allocate them to the charges on the resident’s account.
Expenses: Each month the expenses will be broken down by the type of service performed for your property. Examples of such expenses include but are not limited to: advertising, landscaping, contract services (maintenance) or electricity. Each month, along with your financial statements, you will receive an Executive Summary prepared for you by Professional Asset Management and Sales. Within the Executive Summary, a detailed breakdown of your expenses such as HVAC and Contract Services and Make Ready services will be listed for your review.
Net Income/Loss: This is calculated by taking the total amount of your income less your expenses during the reporting period.
Other Transactions
Paid to Owner: At the end of each reporting period, owner distributions are calculated based on the performance of the property. Distributions are calculated by taking your cash balance at the close of the period less your property’s cash requirements. All funds available above the cash requirements are sent to you and will be listed here. This line item will also show any funds received from you either to fulfill cash requirements or if you send in funds to perform major renovations.
Net Change in Security Deposits: This reflects any activity regarding the security deposits held for your property whether it be for the receipt of security deposits from a new move in or the refund of a security deposit when a resident moves out.
Ending Bank Balance: This is your balance after all income, expenses and other transactions have been recorded for the month. Your ending bank balance should always balance to your cash requirements. If there is a deficit and your ending balance is less than the cash requirements, you may need to send in funds to being your balance to the required level. Your ending balance is figured by taking your:
Beginning Balance (+/-) Net Income/Loss (+/-) Other Transactions = Ending Bank Balance.
Cash Requirements
Total Reserves: These are the funds agreed upon in your management agreement. Reserves are used for the day-to-day management of your property. These funds are available for us to use on your behalf to pay for services performed for your property. Each month, as explained above, these funds are replenished at the end of the reporting period prior to distributions being released to you.
Security Deposits Held: This is the total of security deposits held for your tenants at the end of the reporting period.