What is an 'operating statement'?

An operating statement is fundamentally a financial summary that outlines a property's income and expenses over a specific period. This document provides property managers and owners with vital insights into the financial health of a property, allowing them to assess profitability, manage budgets, and make informed decisions regarding operations.

The operating statement typically includes detailed line items that capture various revenue sources such as rental income, and additional forms of income, as well as expenditures ranging from property management fees to maintenance costs, utilities, and taxes. By reviewing this financial summary, property managers can identify trends, forecast future performance, and implement strategies for cost control or revenue enhancement.

While other options may serve important functions in property management, they do not relate to the primary purpose of an operating statement. A list of potential tenants focuses on occupancy rather than financial performance, a document for legal disputes addresses liability or compliance matters rather than financial metrics, and a marketing tool pertains to attracting tenants rather than providing financial oversight. Thus, the distinction of the operating statement as a financial summary of income and expenses is clear and essential for effective property management.