What a Monthly Property Management Report Should Show

What goes into the statement

A monthly statement is the manager's account of the money that moved through your property during the last period: what came in, what went out, what is still owed and what is left. No statute prescribes its layout. The format, the reporting date and the level of detail are set by your management agreement, so the first time you receive one, read it alongside that agreement.

Statements that are easy to check share the building blocks below. The two most often missing are a line for unpaid rent and a list of items still waiting on a decision.

• Beginning operating balance carried over from the previous statement
• Rent received, by unit, with the date each payment arrived
• Unpaid or partial rent, shown apart from rent received
• Each expense paid, with the vendor, the work, the amount and a receipt or invoice
• The amount paid to the owner and the transfer date
• Ending operating balance carried to the next statement
• Pending items: open work orders, estimates awaiting your approval, rent follow-up in progress

A sample statement

The figures below are a made-up example, not a typical property and not a fee quote. They assume one rental home, no unpaid rent this month, and no management fee shown. The point is the arithmetic.

Beginning balance $2,000, plus rent received $3,500, minus approved repairs paid $450, minus the payment to the owner $3,000, leaves an ending balance of $2,050. On next month's statement the beginning balance should read $2,050. If it reads anything else, ask why.

The tenant's security deposit and its interest do not appear anywhere in this calculation. If the manager holds the deposit, the statement can note where it is held, but the money is not part of the operating balance and cannot be used to pay the $450 repair.

• Beginning operating balance: $2,000
• Rent received: +$3,500
• Approved repairs paid: -$450
• Paid to owner: -$3,000
• Ending operating balance: $2,050
• Security deposit and interest: held separately, outside this ledger

Unpaid rent and pending items

Rent that was due but not paid is not income yet. A clear statement shows the amount due, the amount received and the difference, and says what has been done about it so far. Counting expected rent as received makes the balance look healthier than the bank account.

Pending items are the things that will affect next month's money or the condition of the property: a repair that is scheduled but not done, an estimate above the approval limit waiting for your answer, a tenant request still open. Listing them every month means you see a decision before the bill arrives, not after.

If rent stays unpaid, whether to send a notice or go to court involves legal steps and deadlines. That belongs with an attorney, not in the monthly statement. A landlord or manager may not change the locks, shut off utilities or hold back necessary repairs to push a tenant out.

Security deposits stay off the operating books

In Massachusetts a security deposit remains the tenant's money. For an ordinary residential tenancy it is generally capped at one month's rent. It must be held in a separate interest-bearing account at a bank in Massachusetts, may not be mixed with the landlord's own assets, and is to be held on terms that keep it beyond the claims of the landlord's creditors (M.G.L. c.186, §15B).

That is why a deposit should never appear on the statement as operating cash, a repair reserve or income. Within 30 days of receiving it, the tenant is owed a receipt naming the bank, its location, the account number and the amount. For each year the deposit is held, interest is due at 5 percent or the lower rate the bank actually paid, either paid to the tenant or offered as a credit against the next rent, together with a statement of the account.

Last month's rent paid in advance is a separate category with its own interest rule: 5 percent a year or the lower amount the bank paid, with no interest for the final month itself. Keep it on its own line rather than adding it to this month's rent received. Whether and how it may be applied before the last month is a question for the lease and an attorney.

When the tenancy ends, the deposit and interest are returned within 30 days, less only the deductions the statute allows, such as unpaid rent or damage beyond normal wear and tear supported by the required itemized documentation. Cleaning fees, management fees and general bills are not on that list.

Checking repair charges

Most management agreements set a dollar limit per repair. Below it, the manager can hire a vendor and pay; above it, non-emergency work waits for the owner's written approval. The amount, and what counts as an emergency, are whatever your agreement says. When you look at a repair line, the first question is whether it fell inside that authority.

The second question is whether the charge is supported. A useful vendor invoice names the property address, the date, the work done and the parts or materials used. Whether the agreement requires an invoice for every charge is a contract term, but without one it is hard to see what was actually done, and the paperwork also matters for warranties and year-end records.

• Is the charge within the per-repair limit, or was written approval given?
• Does the invoice show the address, date, work and materials?
• Was a part or appliance replaced, and is the warranty paperwork attached?

A monthly review routine

A review takes a few minutes once you follow the same order each month. Questions are easiest to answer while the month is fresh, and the checked statements become your records for tax preparation at year end.

• Compare rent received with the rent each lease calls for, and note any unpaid amounts
• Check that this month's beginning balance equals last month's ending balance
• Check each repair against the approval limit and its invoice
• Confirm the deposit is not counted as operating cash or income
• Answer the pending items that need your decision
• Save the statement and attachments in the property's file for the year