1Rental property owners have a ton of paperwork to shuffle and documents to manage. And while all are equally important, there is one set of data that should always be on your radar. The monthly statement is a receipt and review of all the month’s activities for a rental property. Unfortunately, it’s also one of the documen24t metrics that gets overlooked the most.
It can be time-consuming to schedule time to review these monthly statements, especially if you’re self-managing multiple properties in your portfolio. But the monthly statement is a window into your expenses, income, and overall trending ROI performance. Not spending time with these each month could prove to be costly. Today, we’ll discuss three of the many critical reasons you should be reviewing your monthly statements if you aren’t already doing so.
The Best Way to Find Errors in Real-Time
One of the most significant benefits of reviewing your rental property’s monthly statement is finding errors in real-time. Even a quick glance through the details can help you identify an overcharge, a duplicated fee, or a missing expense. Not catching those mistakes right away can quickly turn into several months’ worth of repeated issues. As an example, imagine you realize a hardware vendor charged double for a replacement doorknob. Finding and collecting the refund now can prevent future oversight and overpayment. But on a grander scale, imagine an extra zero showing up on one of your monthly expenses. That could represent an even bigger problem to fix if not handled immediately.
Identify Fraudulent Activities Before They Become Substantial
Common errors and mistakes are one thing. But another reason rental property owners should be reviewing their monthly statements is to spot and recognize trends that may be a sign of fraudulent activity. Errors will occur on occasion. However, should you find a recurring mistake with a more nefarious purpose, you can quickly uncover fraud. This may not be a routine problem for rental property owners. But not finding it can translate to more serious and costly remedies down the road.
Tracking Your Rental Property Receivables
Monthly statements aren’t just for tracking expenses or monitoring money spent. It’s also the best way to keep your finger on the pulse of your receivables. Knowing if and when you’re getting paid should be one of the most important tasks you manage. The monthly statement is perfect for outlining who has paid, who still owes, and allows for a method of checks and balances of the numbers as you reconcile each month. An oversight of revenue owed or miscalculated payments can be tough to undo and remedy if not caught and addressed immediately.
There are countless advantages and benefits to spending time with your monthly statements beyond the three we’ve outlined here. But because it’s often one of the documents that gets overlooked by rental property owners, this discussion hopefully serves as a great reminder. It’s the easiest way to see a snapshot into your investment and business activity month after month.
If you need help with your monthly statement review, whether it’s organizational or just finding time to manage them, contact us. You may be ready for a rental property management partner who can help you stay on top of all your essential documents, agreements, and reports – including these ever-important monthly statements.
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