By Published On: October 8th, 20249.3 min read

Welcome to our Property Management Knowledge Sharing Series. This series aims to better serve our landlord clients and address the questions you may encounter. In this video, we will demonstrate how to interpret the monthly ownership statement you receive from Midas, covering all the details you might be curious about. Let’s get started. 

Monthly ownership statement

On the top right corner of this rental report is a summary. For instance, the rental income of this landlord from September 1st to October 3rd is $4,298.54. Moving down, “money out” refers to the payable amount by the landlord, while “money in” represents income received. In the “Status” section, you can see the weekly rent for this property and the tenant’s move-out date, which is convenient for landlords with multiple properties.

The “Income” section records that the landlord received $4,400 in rent for September, plus $237.34 for water usage paid by the tenant, totaling $4,637.34. The “expense” section covers fees payable to Midas Property Management, totaling $338.80, including the 10% GST, which is $30.80. Subtracting expenses from income yields $4,298.54, which is the monthly rental income the landlord will receive. Sometimes, we handle various bill payments for landlords, such as council fees, body corp levy, insurances, pest & termite annual check, maintenance, smoke alarm inspection fees, etc., all deducted directly from the rent. This value-added service is provided to help landlords with their annual tax return.

You might wonder why we didn’t include the carpet cleaning fee in the “expense” section. This is because if we did that, the landlord’s July bill would show a negative balance, where the landlords have to pay this bill themselves. To save time for landlords, the “withheld” income of $574.84 is added directly to the “opening balance” for August’s statement, as you can see. In the first property “expense” section, it deducts the unpaid carpet cleaning fee from July. The total net income in August for both properties is $1,351.98, plus the $572.84 withheld from July, totaling $1,924.82, which is credited to the landlord’s nominated account.

At the bottom right corner, “Balance Carried Forward” refers to when the landlord’s income for the current month is less than expenses. But, in this case, the remaining $4,298.54 is credited to the landlord’s nominated account, hence the “carry forward” balance is zero.

Here is another more complicated case. When might landlords not receive their monthly rental income? There are generally two scenarios. One is when tenants prepay several months of rent in advance. In this case, once we receive the payment, we pay landlords the balance after deducting a portion reserved for future bill payments. The second scenario is when expenses exceed income. Let’s take a look at a bill with two properties. On the top part of the bill, this landlord has two properties, and the rental income for July is zero. We will skip the summary on the first page for now, let’s look at the income and expenses for the first property. Income amounts to $990.74, while expenses total $1,366.70, resulting in a net income of -$375.96. This means the landlord still needs to pay $375.96 for the first property in July. Now, let’s see the second property, where income is $1,050, and expenses are $101.20. Therefore, the rental income for the second property in July is $948.80.

Returning to the first page, we can directly subtract the first property’s expenses ($375.96) from the income of the second property ($948.80), resulting in $574.84. Because there’s still an outstanding invoice of $850 incurred, expenses exceed income of $574.84, so the income will be withheld and rolled over to next month.

You might wonder why we didn’t include the carpet cleaning fee in the “expense” section. This is because if we did that, the landlord’s July bill would show a negative balance, where the landlords have to pay this bill themselves. To save time for landlords, the “withheld” income of $574.84 is added directly to the “opening balance” for August’s statement, as you can see. In the first property “expense” section, it deducts the unpaid carpet cleaning fee from July. The total net income in August for both properties is $1,351.98, plus the $572.84 withheld from July, totaling $1,924.82, which is credited to the landlord’s nominated account.

Weekly paid to vs Effective paid to

After explaining the basics of the ownership statement, let’s now dive into two key terms that landlords often inquire about: which is “Weekly Paid To” and “Effective Paid To.” As we all know that rent in Australia is calculated on a weekly basis. For example, this report states a weekly rent of $530 per week.

To understand these two concepts, let’s consider two scenarios. In the first scenario, which is the most straightforward, tenants pay rent every 7 days, such as weekly or bi-weekly (every 2 weeks) or even every 4 weeks. In this case, the “Income” section will not include terms like “part payment” or “effective paid to” in the status remarks. This is because the “Effective Paid To” date, which represents the actual date the rent is paid, perfectly aligns with the “Weekly Paid To” date, which signifies the end of the weekly rental period.

In the second scenario, as shown in the bill, you’ll notice terms like “part payment” of  $511.43 in the “Income” section, which is apparently not the usual weekly rent of $1,100. The backend system will automatically calculate the “Effective Paid To” date corresponding to this $511.43, . Whether the tenant pays weekly or submits an amount that isn’t the weekly rent, the system tracks and calculates the corresponding date. This is why sometimes you’ll see the “part payment” terms in the status remarks, and the “Effective Paid To” date does not match the “Weekly Paid To” date. Property managers use this accurate data to determine whether tenants are paying rent on time, how many days in advance they’ve paid, or if they’re paying in arrears by a few days. There are various paid software options on the market, and we currently use one of the most reputable property management systems in Australia. It may come with a higher cost for us, but it has proven to be reliable over the years, providing peace of mind for both property managers and landlords. So, rest assured as we’re no longer in the era using free Excel spreadsheets to key in the information one by one. 

Financial year statement

Now, let’s talk about the annual financial statement, which is also a value-added service we provide for free, making it convenient for our landlords when it comes to tax returns. As we help them to manage and pay property-related bills, this annual report records all expenses, income, and taxes for the entire fiscal year. Landlord clients no longer need to spend extra time and effort collecting all the bills related to their investment property for tax purposes. They can simply provide this consolidated financial report to their accountant, saving them the annual fee of $99 or more, that other agencies may charge for this service!

You might have noticed the ‘closing balance’ at the bottom of the report. In most cases, we transfer the entire net rental income to the nominated account of our landlords, thus the closing balance is zero. Why would closing balance in this case, showing a surplus? Well, this is a customized service designed to help landlord clients manage their taxes more efficiently. As we mentioned in a previous video about saving tax tips, some individuals choose to delay receiving certain income to reduce their tax liability for a specific fiscal year. This is a great example that the landlord requests us to withhold their rental income until the next fiscal year, at which point it’s transferred as a lump sum to their account.

Conclusion

If you have any questions about the case analysis we’ve discussed or if you need guidance on other property management matters, please don’t hesitate to get in touch with us. That’s all for today’s video, we hope this has been helpful to you. See you next time!

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