The Ultimate Guide to Rental Property Income Statements

Rental Property Income Statement

When it comes to income producing real estate, the role of an income statement quickly becomes apparent. This key real estate financial report paints a vivid picture of the property’s incoming revenues and outgoing expenses over a specific period, offering vital insights to owners, managers and investors. Understanding an income statement is an invaluable skill for owners, managers and investors to possess, as it can provide a detailed understanding of a property’s revenues and expenses. As we delve deeper into this subject, you’ll discover just how influential an income statement can be in shaping the trajectory of a rental property’s success.

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Income Statement Definition

An income statement, also called a Profit and Loss Statement (P&L), when used for a piece of real estate, summarizes the revenues (like rental income), and the expenses (like property taxes, maintenance, and insurance) incurred over a specific period of time. The difference between the total revenue and total expenses represents the net income or loss, providing insight into the rental property’s profitability.

Income Statement Explained

An income statement is like a report that shows how much money the property has made (through rent or other income) and how much it has spent (on things like maintenance, taxes, or mortgage interest) over a certain period. By subtracting the expenses from the income, you can see whether the property is making or losing money, which can help in decision-making about the property’s management or future.

What Information is on an Income Statement?

Although an income statement may differ depending on who prepared it, rental property income statements generally all contain similar information. Below is a list of the most common property information you can expect to find on an income statement for a rental property:

  • Gross Revenue: This includes all income generated by the property. Most commonly, this is rental income, but it could also include other sources, such as fees for late payments or income from vending machines or laundry facilities in the building.
  • Operating Expenses: These are the regular, necessary costs of running the property. They can include:
  • Net Operating Income: This is calculated by subtracting the total operating expenses from the gross revenue. It represents the income generated from the property before factoring in debt service or capital expenditures.
  • Debt Service: This refers to mortgage payments or other debts associated with the property.
  • Capital Expenditures: These are larger, often one-time expenses for significant improvements or repairs. They could include a new roof, upgraded HVAC system, or major landscaping.
  • Net Income/Loss: This is the final line of the income statement. It’s calculated by subtracting the total expenses (operating expenses, debt service, and capital expenditures) from the total revenue. A positive number indicates a profit, while a negative number indicates a loss.

Rental Property Income Statement Templates

Rental Property Income Statement Template

Get started creating an income statement (profit & loss) for your rental property with our free downloadable and customizable template below. The rental property income statement (profit & loss) template opens up as an Microsoft Excel and can be edited in Microsoft Excel or compatible programs.

Rental Property Income Statement FAQ

Are P&L Statements the Same as Income Statements?

Yes, “Profit and Loss Statement (P&L)” and “Income Statement” are essentially the same. Both terms refer to a rental real estate financial report that summarizes the revenues (like rental income) and expenses (like maintenance costs, taxes, and insurance) associated with managing a rental property over a specific period of time. The goal of both reports is to show the net profit or loss of the property during that period.

Are Income Statements the Same as Cash Flow Statements?

No, income statements and cash flow statements are not the same. An income statement, also known as a profit and loss statement, focuses on summarizing the net income or net loss over a specified period of time. On the other hand, a cash flow statement tracks the inflow and outflow of cash, which reflects how account changes affect cash and cash equivalents. In simple terms, an income statement shows whether a property is profitable or not, while a cash flow statement shows where the property’s cash came from and where it went.


My name is Ryan – I’m an investor, real estate developer, and property manager with hands-on experience in all types of real estate from single family homes up to hundreds of thousands of square feet of commercial real estate. RentalRealEstate is my mission to create the ultimate real estate investor platform for expert resources, reviews and tools. Learn more about my story.

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