Yes, in most cases. Your property manager keeps records for the money that passes through their account: rent they collect, repairs they pay for, and their fees. They don't track what you pay yourself, like the mortgage, insurance, property taxes, your own repairs, or anything for properties they don't manage. Their statement is an important part of your books, but it isn't your books.
What the property manager's statement covers
A monthly owner statement usually shows rent collected, management and leasing fees, repairs and maintenance they paid, any reserve they hold, and the amount sent to you. At year end you'll usually get a 1099 showing the rent they collected on your behalf.
What it leaves out
Your mortgage, including the interest, which is one of your largest deductible expenses
Property taxes and insurance, especially if they're paid through your lender's escrow
Repairs and improvements you paid directly, outside the manager's account
Travel, legal fees, accounting fees, and LLC costs
Properties the manager doesn't handle, if you self-manage 1 or more
Depreciation, which your CPA calculates from the property's cost and improvements
If your CPA works only from the manager's statement and the 1099, these costs are either missed or pieced together from memory at tax time.
Common problems when the statement is the only record
The 1099 shows gross rent. It reports what the manager collected before fees and repairs. Without the statements recorded in your books, it's easy to report more income than you actually had.
Reserves get counted as an expense. Money the manager holds back as a reserve is still yours. It becomes an expense only when it's spent.
Year-end timing doesn't line up. December rent collected by the manager and sent to you in January belongs to December. Recording it by the date it hit your bank puts it in the wrong year.
No property-level view. With 4 properties and 1 manager, a combined statement doesn't always tell you what each property made after the costs you pay yourself.
How the 2 fit together
Each month, the manager's statement gets recorded in your books by property, and the payment you received is matched to it. Then everything you paid directly gets added. The result is a profit and loss for each property that includes every cost, and a year-end package your CPA can file from.
Where to start
If you have a property manager and you're not sure the full picture is being captured, tell us where your books stand. We'll go through it on a short discovery call.
REVI Bookkeeping works with house flippers and long-term rental landlords anywhere in the US.
