Lake Nona is one of the fastest-growing areas in the USA. It's particularly attractive to entrepreneurs thanks to its innovative infrastructure.
As a result, there's a high demand for rentals in this area, making it a profitable place for those who want to earn a passive income. It's not as simple as that, though.
Any experienced property owner will tell you there's a lot to figure out when it comes to earning money from rental real estate. One of the things you'll need to understand is the concept of owner disbursements.
Keep reading while we explore this complex topic.
What Are Owner Disbursements?
The term 'owner disbursements' refers loosely to payments you receive from owning property. The amount you receive is based on profit.
It includes things like rent after expenses and business expense reimbursements. These payments aren't considered expenses if you record them in your business books as a payment to yourself.
Most property owners receive their disbursements at agreed-upon intervals, either monthly or annually.
Managing Disbursements for Owners
If you receive more than $600 in income from your rentals per year, the way you manage your rental real estate and your owner's disbursements has an impact on your business and personal tax.
If you work with a property manager, you'll receive regularly updated accounting information that you can use to complete your taxes correctly. This includes:
- Income reports
- Expense reports
- Operating statements
- Monthly balances
You can take advantage of property management accounting services to help you figure this all out. If you manage your properties on your own, it's best to hire a tax accountant to assist you.
Disbursements for REIT Investors
Some property investors own shares in a REIT (real estate investment trust) instead of owning real estate. Disbursements from these investments take the form of dividends from the REIT's income.
The REIT distributes ordinary income to shareholders when they sell property. You may need to pay federal capital gains tax on this income.
If you choose to get all your investment or a part of it back, you receive a return on capital.
Making Sense of Investment Property Disbursements
Managing your ROI and paying taxes due to owning property are the most complicated parts of being a landlord. Hiring a property manager is the best way to navigate this aspect, especially for first-time landlords.
When you hire a property manager to take care of this technicality and much more, you can rest assured that you're complying with the applicable tax laws.
Get the Most Out of Your Lake Nona Property
A property manager helps you maximize your rental income and minimize your expenses to ensure you enjoy a profitable income from your investment properties.
They set an appropriate rental rate, manage your owner statements, and collect rent on your behalf. When you work with an experienced manager, you can keep track of all the paperwork related to owner disbursements and expenses.
Verandah Properties makes every aspect of property management easier for you. Reach out today to experience what it's like to work with true property professionals.