How to read a property management statement?

One of the most common questions from property investors is: “How do I read a property management statement?”

Sure, it sounds straightforward – until you’re looking at one.

In this article, you’ll learn how and when your property manager pays and how to read your statement.

At the end of the article, you’ll also learn the answers to some commonly asked questions about property management statements.

When does my property manager pay me?

Let’s start with the basics – as a property investor you hire a property manager to collect the rent from your tenants. They then pay that money to you.

This typically happens twice a month – at the start and again in the middle.

Usually, rent is paid to you on the 1st and the 15th of each month. But this can change by a few days due to weekends and public holidays.

You’ll also receive an ownership statement from your property manager every time you’re paid. This will be emailed to you.

This statement will show you:

• The money that has come in (rent and bond)

• The money that has gone out (property management fees and maintenance)

• The amount of money paid to you, the property investor.

What’s included within a property management statement?

Let’s go through a real statement from one of my Christchurch rentals. I’ve redacted some information (like my tenant’s name and address) for privacy.

This is a particularly interesting statement since the tenants have changed, and the rent increased.

Let’s take a look:

Money in

The statement shows:

• My tenants were paying $465 a week. And they paid up to January 28.

• This is just here for my information, as this statement covers 2 weeks at the end of February.

This was to cover additional cleaning necessary when the tenants moved out.

My new tenants have paid rent of $480 per week (for two weeks). The specific dates are listed for which period the rent covers.

So all up, a total of $1,171.89 came in.

Now let’s look at the money that came out:

Money out

Multiple expenses came out over the 2 weeks this statement covers:

• The cleaning bill of $211.89

• Plumbing, which cost $324.53 (more on this below), and

• Property management fees of $38.35 per week (for 2 weeks)

This came to a total of $613.12.

Money paid to the investor

At the bottom of the statement, you’ll see how much money gets paid to you as the owner.

Even though $1,171.89 came in, I only got paid $558.77 because there were expenses to pay.

Quick note: It’s worth pointing out that while my tenants paid $211 for the cleaning, that money went straight out to the cleaners.

Since this is a particularly interesting rental management statement, you might have a few questions –

Is this amount of maintenance normal?

In the above statement, there are several extra costs for cleaning and plumbing. That sounds like a lot of expenses, so you might wonder if that’s normal?

Yes and no.

You shouldn’t expect half of your income to go out to costs each fortnight. But you should expect there to be some extra maintenance work when your tenants first move in.

Why? Because there will be things that the previous tenant didn’t report to the property manager.

That could be:

• they didn’t really care about it (since they were about to move out)
• they just put up with it
• or maybe even because they broke it and didn’t want to fess up.

Either way, my responsibility as the owner is to get it fixed.

The property manager will link your invoices in the initial email, so you can see what work was done.

You can click on the invoices in your email to get more detail.

Here is the invoice I received for the plumbing work.

In this instance, the waste disposal was not working.

We agreed to remove the unit and replace it with a basket waste to save on future maintenance costs.

Waste disposal units are notorious for needing a lot of maintenance, and this was a way to save myself another bill in the future.

How much attention should I pay to my statement?

You should always check that the money mentioned on your statement is accurate and that the cash appeared in your bank account.

Opes Partners managing director Andrew Nicol learned this the hard way.

In our book, Wealth Plan, he talks about how he had a property where he regularly received statements from his property manager.

But then the bank called. Andrew was behind on his mortgage.

That seemed strange, since the rent should have covered the mortgage.

While the property manager was sending statements … they weren’t paying Andrew the money. Ultimately, the property manager skipped town, and Andrew had to make up for the shortfall.

Now, most property managers are decent people. They’re not there to take you for a ride. But it’s always worth double-checking that the money hits your bank account.

What if I don’t understand something in my property management statement?

The property management statement you’ve seen in this article is just an example of what one can look like.

While your property management statements will probably look similar … you may still have questions. So if you have a query or your statement doesn’t look right, don’t be afraid to message your property manager.