According to ZipRecruiter.com, the average landlord salary in the United States is $86,748 annually. However, in Irvine, California, landlords make more: a staggering $93,686, on average, yearly!
Wouldn't it be nice if you could generate that much income as a new landlord in Irvine? Of course, it would, and one way to achieve this goal is by managing your owner disbursements efficiently.
To help you start on the right foot, check out this guide on effective disbursement management compiled by PMI Orange County's property management experts.
Maintain Accurate Records of Owner Disbursements by Type
Owner disbursements are payments made to and by rental property owners involving the operation and management of their rental business. The primary types include:
- Rental income
- Operating expenses
- Profits
Since you'll receive and make different payments for various reasons, one of the top financial disbursement tips to follow is to categorize them based on type. Doing so makes it easier to sift through, review, and maintain accurate accounting records and simplify number-crunching during tax season.
Rental Income
Rental income is the money paid to property owners by tenants for renting the unit. However, it doesn't pertain to the owner's actual take-home earnings.
Operating expenses
Operating expenses refer to the costs incurred and paid by property owners to operate and manage the rental. According to Investopedia, operating expenses for a new rental property can be anywhere from 35% to 80% of the owner's gross operating income.
The fees you incur when you market your property and screen tenants are examples of operating expenses. Property management payments are another. The costs of maintaining, repairing, and upgrading/improving your property to attract or keep great tenants also fall under this category.
Profits
Profits refer to the money paid to property owners after subtracting expenses from their rental income.
Suppose you charge your tenant a monthly rent of $1,500, and your monthly operating expenses amount to $500. In this case, your monthly profits equal to $1,000.
Use Property Management Software
Property management software helps simplify disbursement management and real estate income allocation by:
- Organizing disbursements by type
- Tracking income, expenses, and profits
- Generating financial reports
- Forecasting future income and expenditures
- Creating budgets based on forecasts
So, by using property management software, you can quickly determine whether your Irvine rental is profiting, if it's only breaking even, or if it's making you lose money.
Partner With PMI Orange County
PMI Orange County is a property management firm serving Irvine and Orange County, CA. Our full-service solutions include:
- Comprehensive tenant screening
- Accurate financial reporting and accounting
- Lease enforcement
- Efficient rent collection
- Timely owner profit distribution
- Proactive property maintenance and prompt repairs
So, when you hire us as your dedicated property manager, we'll do our best to make your disbursements more of profits rather than expenses.
Turn More Owner Disbursements Into Profits
Effectively managing owner disbursements involves maintaining accurate property accounting records and using rental management software. But why bear the burden alone if you have professionals at your disposal?
Let PMI Orange County be your go-to for expert property management, including accurate financial reporting and accounting. Our owner and president, Kevin Wong, is a highly esteemed and experienced realtor and broker with over 16 years of expertise in real estate brokerage.
Drop us a line today, and we'll happily provide you with a free rental analysis!
