Texas is one of only five states with a gross domestic product or GDP of over $1 trillion. Along with California, New York, Florida, and Illinois, it contributes 41% of the nation's GDP.
Rental real estate is the most significant industry across the US. It makes up 13.2% of its GDP.
You'll need a way to keep track of your earnings if you want to be a part of this thriving industry. Read on to learn everything you need to know about owner disbursements in Denton, Texas.
What Are Owner Disbursements?
Owner disbursements are any payments you receive from a rental property. Examples include:
- Property management funds
- Rental income
- Expense reimbursements
- Late fees
- Pet fees
- Application fees
- Security deposits
They're given at regular intervals, typically every month or year. They aren't classified as a business expense. The value of the disbursement depends on the profit you earn.
Calculating Disbursements
Calculating disbursements is essential for keeping track of your landlord finances. They should be part of a statement that includes income, expenses, and repairs.
Creating and reviewing these statements helps you see how your property is performing and how you can make it more profitable. They're also necessary at tax time when you have to pay property taxes and report rental income to the IRS.
REITs and Working Capital
You can use owner disbursements for a REIT or real estate investment trust. They distribute up to 90% of a property's income to shareholders without you managing or owning them. That income is subject to additional fees and taxes.
Disbursements and capital gains can also be used for working capital. That money can cover debt or keep you from diluting ownership by selling equity. Try to only do this in emergencies and keep disbursements in an equity account.
Best Practices
Keep all your rental property finances in their own account. Review everything, including your disbursements, regularly to see how you're doing.
Set aside money for your maintenance and repairs. It'll help you fix small issues before they become major problems. You also won't have to stress about not having enough money to tend to emergencies.
Automate rent collection as much as possible. It'll make the process easier and increase your income.
Using Property Management
Do owner disbursements still have you scratching your head? Are your other daily landlord responsibilities leaving you with no time left to handle them? Hiring a property manager is an easy, effective solution.
They have a team of vendors to handle all of your maintenance issues. They know how to handle taxes and local laws to maintain compliance. They also know the best ways to attract and keep tenants.
They do this without you having to get involved. Your property will be more profitable, and you'll start earning passive income whether you live in Denton or are states away.
Delegating Dealing With Disbursements
Owner disbursements are any money paid to you for your rental property. Calculating and managing them helps you stay profitable.
PMI United provides full-service property management and real estate brokerage services. Contact us today to see how we can increase the value and rental rate of your investment month after month.
