Demystifying Owner Disbursements: A Guide for Dallas Landlords

Demystifying Owner Disbursements: A Guide for Dallas Landlords

The population increase in Texas is insane, to say the least, with over a million new residents since 2020. Among the most popular cities for new arrivals is Dallas.

This is welcome news for Dallas landlords looking to make a great profit. But before you start seeking tenants, you should understand how owner disbursements work.

This refers to the payments received from your rental property. Make sure you understand the process to succeed as a landlord.

Here's what you must know:

How Owner Disbursements Work

It's crucial to note that owner disbursements don't necessarily translate to your profit. This refers to any payment you receive related to your rental property.

Owner disbursements are paid to the landlord by a third party. For example, your property manager may collect the money and transfer it to you. Property managers will serve as the middleman between you and your tenants.

Disbursements can include rent payments, bill payments, reimbursements, security deposits, late fees, etc. It can also include a combination of any of these payments.

The value of the disbursement is based on your profit. You'll have to keep track of this for your books.

Keeping Records

Following up on the previous point, let's go over a few basics on how to keep records of owner disbursements.

You can use a software program such as Microsoft Excel or QuickBooks for your bookkeeping. You'll have to keep track of the following in separate columns:

  • Rental income
  • Property expenses
    • Bills, utilities, maintenance fees, etc.
  • Repair costs, emergencies, inspection costs
  • Property Manager Fees
  • Property Taxes

You'll need to clearly distinguish between what you charge your tenants and the associated expenses. One column should state the final amount after expenses. Highlight the cell in green if you've made a profit and in red if you've incurred a loss.

Best Practices

Here are a few best practices to consider when dealing with owner disbursements:

You should set up a separate bank account solely to receive disbursements. Keep several digital and physical copies of your accounts. Send a copy to a professional accountant as well.

Set aside funds to cover future emergency expenses. You may also have to pay estimated taxes. You'll have to review your profits and your cash flow each month. This will help you assess your financial health. It helps you decide if you need to raise your rent in the future.

An accountant can also offer financial advice on how to improve your landlord finances in the future.

Succeed as a Landlord

Now you know how owner disbursements work and how you can succeed as a landlord in Dallas.

A third party, such as a rental management service handles the disbursements. You'll have to keep track of your profits and your expenses.

Follow our bookkeeping tips to keep track of your landlord finances. Make sure you also follow the best practices to increase your profits.

If you need to find a great property management service, the next step is to contact PMI Premier.