There's never been a better time to be a landlord. Current data shows that more Americans are trading the expense of buying a home for the freedom that comes with renting.
Being a landlord has its fair share of expenses, but it is also super profitable, especially when your owner disbursements start rolling in from your Raleigh property management company. Curious to learn more about what owner disbursements are and how they work? Read on to find out!
What Are Owner Disbursements?
Owner disbursements are funds paid to property owners from the rental income they receive from their properties. Typically, property owners receive owner disbursements from their property management services. If you don't have a property management company, you can also issue owner disbursements to yourself.
Owner disbursements are a net income. They represent the rental income left once deductions for expenses, including:
- Property management service fees
- Utility bills
- Insurance costs
- Property taxes
- Repair costs
- Marketing expenses
- Legal fees, when applicable
These disbursements typically go out once a month. If you're working with a management company, expect to receive a statement detailing income versus expenses.
Why They're Critical for Success
In short, they're money you live on. Without them, you won't be able to cover personal expenses, let alone business expenses. If you aren't bringing home a profit, then your rentals are not sustainable.
You can use them as a metric for business growth. Seeing incremental growth in your disbursements is a sign that you're doing something right. On the other hand, decreases in disbursements are a sign that you need to make some changes.
Disbursements are taxable, so make sure that you're staying on top of recordkeeping so you're ready for tax season.
Optimizing Your Disbursements
Optimizing your owner disbursements is code for optimizing your income! The question to ask is whether you're being as efficient as possible in the operation of your rentals. For example, if you're hiring out several different services instead of a central property management company, you may be paying more than you need to!
Property management companies handle all aspects of rental management, from rental property accounting to lease enforcement. They have established relationships with vendors that bring down the cost of maintenance. They can also help you determine where you need to invest your money moving forward!
Hiring a management company is the best thing you can do for your rental income management!
Do You Need Support with Your Rental Property?
Owning rental property is hard and rewarding work. Receiving your owner disbursements is like a reward for all of the hard work you've put into your property. If you need assistance making decisions about where to invest your money once you receive it, don't hesitate to reach out to your property management company to help you strategize!
Are you looking for a property management company with unparalleled expertise in the Research Triangle region of North Carolina? PMI Triangle brings a wealth of localized experience with access to nationwide resources to help you optimize your rentals. Contact us today to learn how we'll transform your rentals!
