A report from the National Apartment Association says that only 7 cents of every dollar of rental income is returned to landlords as profit. Almost 50% goes to the mortgage alone.
That's where owner disbursements come in. They help you track who you're paying and how much so you can use that data to become more profitable.
Read on to learn five key strategies for managing owner disbursements in Fullsom, CA.
1. Establish Clear Policies
Set up well-defined policies for your owner disbursements. This includes:
- Frequency
- Amount
- Purpose
- Maximum withdrawal limits
- Approval requirements for large disbursements
- Timelines for distributions
These clear policies help avoid confusion and keep your records consistent.
2. Separate Your Funds
Create a specific line on your budget for owner disbursements. Keep them in a separate bank account as well.
This stops them from getting intermingled with any other funds. They won't get mixed up with your personal funds or other business expenses such as payments to:
- Staff
- Property managers
- Contractors
- Grounds maintenance crews
3. Maintain Records
It's impossible to manage rental disbursements without clear and careful accounting records. You need to keep track of what money goes in and out of your property at all times. Failing to do so will leave you with an inaccurate owner disbursement.
Proper records are also essential for tax preparation. One wrong number can lead to major issues or even an audit.
One useful piece of landlord financial advice is to use accounting software to automate the process. It also simplifies everything for renters, encouraging on-time payments.
4. Manage Income and Expenses
One of the most obvious rental income tips is to make sure your tenants pay rent on time, but it's not always that simple. Census.gov says 44% of households in California rent, but 1 in 9 tenants are behind on payments. Be flexible enough to accept late payments if they have a legitimate reason. Use disbursements to stay financially prepared so it doesn't ruin your bottom line.
Leave extra money in the budget for administrative and maintenance expenses. Set aside a fund for emergency maintenance because you can't predict everything.
5. Get Professional Help
Are you trying to manage owner disbursements alone? That opens you up to mistakes or ineffective practices.
Look for local Folsom, CA property managers to help you out. They can provide general property management tips and specialized information. They watch the local market like hawks to find the best neighborhoods and determine attractive rent rates there.
Managers help you make more money and find the best income distribution strategy. That means putting your money towards your long-term goals. Do you want to invest in improvements to the property? Do you want to expand your portfolio? A manager can help you achieve your dreams.
Find Success With Owner Disbursements
Successfully handling owner disbursements requires setting clear policies, separating your funds, maintaining records, managing income and expenses, and getting professional help.
At Residential Equity Management, we pride ourselves on being the leading property management company in Fulsom, CA. We stay current on the latest trends to let you take advantage of them. Contact us to see how we can maximize your property's profitability today.
