There are an estimated 10 to 12 million individual investor landlords in the United States, most of whom own just one or two rental properties. Managing these properties can be challenging, especially when it comes to understanding the financial aspects, like owner disbursements.
These disbursements are payments made to property owners from rental income after expenses are deducted. For many landlords, knowing how these disbursements work is essential for keeping track of their investments and ensuring they remain profitable.
In this blog post, we'll break down what owner disbursements are, how they're calculated, and what landlords in Hillsborough need to know.
What Are Owner Disbursements?
Essentially, owner disbursements are the payments made to property owners from the income generated by their rental properties.
When a tenant pays rent, the property management company collects this income. From this amount, they deduct any expenses related to the property's upkeep. These expenses can include:
- Maintenance
- Repairs
- Property management fees
- Utility bills (if they are covered by the landlord)
After all the necessary costs have been deducted, the remaining funds are disbursed to the owner. This is what is known as an owner disbursement.
How Are Disbursements Calculated?
Calculating owner disbursements involves subtracting all expenses from the total rental income.
For example, if a property generates $2,000 in rent each month and has $500 in expenses, the owner disbursement would be $1,500. Expenses can vary each month depending on what services are needed, such as repairs, maintenance, property management fees, insurance, taxes, or even HOA fees.
Some months might have higher costs due to unexpected repairs or seasonal maintenance, while others might only have the regular property management fee.
It's important for property owners to review these expenses regularly to ensure they align with their expectations and the terms of their management agreement. Properly understanding these fluctuations can help property owners anticipate their monthly income more accurately.
What to Expect in Hillsborough?
In Hillsborough, property management companies like Gates Management and Realty provide detailed statements of income and expenses with each disbursement. These statements help owners understand where their money is going and track their investments effectively.
Hillsborough's rental market is diverse, with properties ranging from single-family homes to multi-unit apartments. As a result, landlord disbursements can vary widely depending on the property type and location.
By working closely with a property management company like ours, owners can better understand their disbursements and find ways to maximize their rental income.
Property Disbursements in Hillsborough
To sum up, understanding owner disbursements is key to successful property management in Hillsborough. By knowing how these payments are calculated and what expenses are involved, property owners can better manage their finances and maximize their rental income.
At Gates Management and Realty, we are a full-service property management company committed to helping property owners navigate these details. We provide clear statements and personalized support to ensure you understand every aspect of your investment.
Whether you own a single-family home or a multi-unit building, we can help you get the most out of your rental property. Partner with us for expert guidance and more property management tips.