You're sitting by the beach again! You love vacationing by the beach in Fort Lauderdale so you come whenever possible.
Every time you come back you notice how much the area is growing. Then the idea hits you "What if I owned property here and rented it out?"
You might worry if you don't live there. How would you take care of the details?
Plus, if you got property management, how would the owner disbursements work?
Owner Disbursements Facts
The owner disbursements are payments of the earnings retained from your rental. It is an amount based on the profit and does not show up as an expense of the business.
If you own a house and rent it out yourself, your taxes may be different depending on the classification of ownership.
If your property is managed by a property management company, you will get regular owner statements and you work out how disbursements are paid.
Owner statements will have the rental income and expenses incurred on your property.
Owner Knowlege Basics
Many owners choose to use a property management company because they handle many of the harder details of ownership.
Rental collection can be one of the downsides of owning rental property, so the management companies can help in that area.
The other benefits come in the form of management accounts. Property management companies have the experience to help you know exactly what information is important for you to have.
The property management report usually contains all the information that you need as an owner. The owner disbursements are in there as well as income/expense reports, operating statements, and monthly balances.
This information is invaluable to an owner especially if they have multiple properties in different locations.
A good management company can give the regular owner disbursements reports for all the properties at once.
Owner REIT Disbursements
Some owners buy shares in a real estate investment trust (REIT) instead of owning specific property.
The investor buys shares in the trust and the REIT pays out dividends from the income to the investors.
Disbursements can be taxed differently based on how the money comes to the owners.
There is ordinary income from rentals that are passed on to the shareholders. There are capital gains from selling property and dividing up the money.
There is also a return of capital when owners choose to get all or part of their investment back.
Your Rental Options
Owning property to rent in Fort Lauderdale or Fort Worth comes with the same issues to deal with.
You want to get your owner disbursements and have the details covered.
Your decision is whether you want to take care of the details or have a property management company take care of them.
Check out more of our articles designed to help you make the best decisions when it comes to rentals.
You can also contact us to help you with your rental investments. Our passion is serving the serious rental investor.