Rental Property Statement Generation: Your Ultimate Guide

July 24, 2023

February 7, 2024


Rental Property Statement Generation: Your Ultimate Guide

Owning a rental property is a promising investment, but it comes with its own set of challenges. One such challenge is generating accurate and comprehensive rental property statements. You can use these statements to track your income and expenses for tax purposes, for example.  

In this blog post, we will discuss rental property statement generation. We will also give a step-by-step guide to creating your own rental property statement.

Understanding Rental Property Statements

Rental property statements are important to check financial performance and assess cash flow. Investing in real estate requires understanding these statements for tax purposes. It's also important to always be checking the business’ financial health.

Statements need to be accurate, and this can be achieved by using a software for real-time tracking like Clearing. Understanding these statements is essential for making informed decisions about the property.

Importance of Accurate Rental Property Statements

Accurate rental property statements influence tax reporting. It ensures transparency in financial performance and helps in financial planning. So, they are an essential tool for property managers and owners alike.

Essential Components of a Rental Property Statement

Rental property income statement is important to keep organized.

It's essential to include total income, operating expenses, and net income. This ensures accurate financial tracking and profit assessment. Detailed expenses and income reflect the property's real-time financial status. 

Understanding these components is crucial for maintaining the property in good financial standing. It helps you to make informed decisions about your investment. For Short-Term Rentals, these statements are the Profit and Loss Statements.

Different Types of Income in a Rental Property Statement

Understanding various income streams is crucial for accurate profit assessment. Regular booking payments serve as a primary income source. Meanwhile, security deposits also play a significant role. 

Other rental income sources also contribute to the property's financial performance. This includes late fees. So, it is important to consider all revenue streams for comprehensive income assessment.

Regular Booking Payments

Regular rental income from guests forms the foundation of regular revenue. Timely payments are vital for maintaining accurate cash flow and for mapping finances properly.  It is beneficial for property owners to understand and manage their booking payments. This contributes to ensuring a good financial standing for your rental properties.

Security Deposit

Security deposits are not considered income but are crucial for rental property statements. Proper accounting and understanding of their role impacts the financial tracking and performance assessment of a property.

Management of security deposits is essential for transparent and accurate financial statements. It influences cash flow and overall financial performance. Clear management guarantees precise financial representation.

Other Income Sources

When managing a residential property, it’s important to consider different revenue streams. Various income sources, like cleaning and late fees, boost the property's financial health. Tracking them ensures accurate profit assessment and enhances financial performance. You can use a software like Clearing for this.

Types of Expenses in a Rental Property Statement

Here are the typical rental property expenses you should take note of.

Operating, unexpected, and maintenance costs impact rental property statements. Investors must understand these expenses for precise financial tracking and property assessment.

Accurate expense tracking ensures transparent financial statements and precise profit assessment. This is important for evaluating a property's financial health. Further, proper expense allocation to individual assets is important for understanding the unit economics of the business.

Operating Expenses

Operating a rental property incurs ongoing expenses like maintenance, utilities, and management fees. Accurate accounting of operating expenses is crucial for precise financial statements. It also aids in tracking property net income and cash flow.

Transparent financial statements rely on the accurate tracking of each unit's operating expenses. This ensures a comprehensive overview of the property's financial performance.

Unexpected Costs

Handling unexpected costs in rental property statements is crucial. Repairs and unexpected maintenance affect the financial health of a business. These costs influence cash flow and change the net income. They are important for accurate assessment and transparent statement generation.

Proper accounting for unexpected costs ensures accuracy. So, it is best for property managers to assess the property's performance in real time without surprises. Create precise financial statements using financial automation tools like Clearing.

Evaluating Net Operating Income in a Rental Property Statement

Calculating net operating income offers a clear picture of the rental property’s income. Real estate investors check it as a key metric for financial performance analysis.

Understanding and listing all income streams and operating expenses ensures a comprehensive assessment. This evaluation in real-time is essential for making informed investment decisions.

Many property managers choose Clearing as a software tool for this very reason. Clearing helps take care of these financial assessments. We present the data in a standardized P&L statement.

How to Calculate Net Operating Income

Calculating the net operating income involves subtracting operating expenses from total rental income. The formula includes gross rental income minus operating expenses. It is crucial for accurate property assessment. Proper calculation ensures an accurate profit assessment which gives valuable financial information to property owners and managers alike.

Profit and Loss Statement for Rental Properties

A closer look into profit and loss statement.

A P&L Statement provides valuable insights into a property's financial performance. It helps owners assess the rental property's financial health. So, it is important to have accurate statements. They aid in decision-making and ensure the property remains in good financial standing.

Key Elements in a Profit & Loss Statement

P&L statements are also called statements of financial results or income, or income statements. Here are the key elements that you can find in a P&L statement:

  • Gross Income
  • Net income
  • Net expenses
  • Tax information
  • Overall Profit

Businesses generate these statements for a given period, such as a quarter or a fiscal year. Rental property statements present the profitability of the rental property. It will help rental owners and property managers have insights into what they can do better. If there are losses, they can identify points to improve on. This includes better customer management, marketing, and the like.

Step-by-step Guide to Creating a Rental Property Statement

Creating a rental property statement involves organizing rent and expense data. Using a template simplifies the process, ensuring accuracy. In fact, Clearing utilizes best practices for rental property statements. Clearing worked with several CPAs to develop the Profit & Loss Statement template that is now built into the platform. 

Adhering to the do's and don'ts of a P&L statement is crucial for precise data presentation. Accurate income and expense tracking is essential. Using software like Clearing to help automate revenue and expense allocations streamlines the process. It also helps cut human errors. 

Step 1. Dates to Include in Your Rental Property Statement  

Property managers can create rental property statements with different periods. It could be on a monthly, annual, and fiscal-year basis. Identifying the dates covered by the rental property statement is important. It ensures you're listing all the important details for tax declarations.

Step 2. Organizing Receipts and Transactions

It is useful to organize and document receipts and transaction data. Doing so allows property owners to create a reliable income statement. This also helps in having a basis for assessing the current financial health of the property.

Tracking receipts is always a good idea. It leaves a record for your accountant to understand the cash flow. Property managers can post receipts to Clearing on the individual transaction record. This keeps the data centralized in one platform.

Property managers should organize and document revenue and maintenance expenses. Doing this helps ensure the residential property is sustainable.

Step 3. Listing Revenue and All Business Operation Expenses

Auditing the cash flow is important for your rental property statement. Here, you must include maintenance costs, profit for owners and investors, commissions, and all other cash flow impacting transactions.

Step 4. Calculating the Net Operating Income (NOI)

The net operating income tells the profitability of your Short-Term Rental. This gives a window to investors to assess if spending their money on the business is a smart move. This informs rental owners and managers alike of business sustainability.

Calculating the NOI follows this formula:

Revenue - Operating Expenses = Net Operating Income

NOI tells you how much you’ve earned after operating deductions. 

Step 5. Keep a Copy of Records after Summarizing

After listing the cash flow, it’s now important to organize and keep all records. You can then send this to your accountant. You can also keep all data and records on the cloud, by using software like Clearing.

Having listed the quantitative data, create a summary of the cash flow trends. State if there are more financial losses or more gains within a certain period. Doing this will help predict how the next few months will be performing.

Using a Template or Software for Rental Property Statement Generation

Struggling with statement generation? Use a template!

You don't have to complicate the streamlining process of generating accurate financial statements. Using a template or automated software like Clearing for rental property statements is the best way to ensure efficiency. 

Clearing has a well-designed P&L template designed in collaboration with CPAs. With this, property managers can simplify the creation of rental property statements. This helps in maintaining uniformity and accuracy.

Templates provide a structured approach for comprehensive and accurate rental property statements. Thus, aiding in real-time financial reporting.

Benefits of Automating the Statement Generation

Using bookkeeping software like Clearing transforms financial management. Here are the several benefits of automating statement generation for Short-Term Rentals:

Saves Time

Using software cuts down on repetitive manual data entry tasks. This allows property managers to spend their time on other business aspects. This could include improving the marketing or strategizing the next lead-generating campaign.

Timely Reports

Accurate and up-to-date data is important when making sound financial decisions. Automation can help maintain timely report production as you can generate them in minutes at any given moment. 


Number of guests will fluctuate throughout the year. Sometimes, bookings are flooding in during "good months". Automating income generation caters to a large amount of data, so, it won’t slow down bookkeeping regardless of data size. Automation reduces the need for extensive manpower.

Centralized System

Using software like Clearing can help you have one place to store your documents. You can upload your receipt of transactions on the platform itself. This serves as supporting details for tax declarations. It is financing, made easy.


Automation makes the tasks simpler for income statements. That is regardless of period; monthly, annual, or fiscal. With a few clicks, you can customize it according to your needs. 

Automating statement generation helps prevent mistakes made by people when reporting finances. It makes it easier to track information, which is important for taxes. Automation also helps keep you informed on how much money is coming in and going out of your accounts to ensure things are being tracked properly. It makes the repetitive task of creating statements, ultimately, much more efficient.

Automate Your Rental Property Statement Now!

Let's help you bring your business to the top!

Creating accurate rental property statements is important for landlords and property owners. It helps in tracking income, expenses, and profitability. A well-structured statement ensures transparency. And, it provides a clear picture of the rental property's financial health.

By automating the statement generation process, landlords can save time and reduce errors. Using reliable software for rental property statement generation is important. Avoiding common mistakes and updating the statement with accurate data is essential.

Let's simplify your rental property statement generation processes and have Clearing help you! Book a call, and let's show you how automation in statement generation can be the game-changer you have been waiting for.

Clearing is a Financial Technology Company, not a bank. Deposit Accounts are issued by Evolve Bank & Trust, Member FDIC. All company names are trademarks or registered trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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