Profit and loss per property: which rentals make money?

Your business made a profit last year. But did every property? Most owners with more than a couple of units have at least one that quietly loses money — subsidized by the others, invisible in a single income statement. A profit and loss statement per property brings it into view.

Why one income statement is not enough

A combined P&L answers "is the business profitable?" It cannot answer the questions that drive decisions:

• Which unit should I raise prices on, or renovate, or sell?
• Is the cabin's high occupancy worth its high cleaning costs?
• Does the new apartment cover its mortgage yet?

To answer those, every income and expense line needs to know which property it belongs to.

Step 1: tag every transaction with a property

In double-entry accounting this is done with departments (also called cost centers or classes). Create one per property, and tag each transaction as you post it:

• Revenue — each stay's rental income and fees go to the property that was booked.
• Direct costs — cleaning, linen, repairs, utilities, property tax, insurance and mortgage interest for a specific unit go straight to that unit.

Tag consistently from the first day of the year and the per-property report builds itself.

Step 2: split the shared costs fairly

Some costs belong to the whole business: your software subscription, a bookkeeper, advertising, the car you drive between properties. Leave them out and every property looks better than it is. Include them with a fair split instead. Common keys:

Whatever you choose, write it down and keep it for the year. The point is comparison, and comparisons need a stable method.

Step 3: read the operating metrics next to the P&L

Profit tells you whether a property works. Three hospitality metrics tell you why:

• Occupancy — nights booked ÷ nights available. Are guests coming?
• ADR (average daily rate) — rental revenue ÷ nights booked. What do they pay per night?
• RevPAR (revenue per available night) — rental revenue ÷ nights available, which equals ADR × occupancy. The best single measure of how well a unit sells.

Two units can earn the same RevPAR in very different ways: one full at a low rate, one half-empty at a high rate. The full one also costs more in cleaning and wear — which only the per-property P&L will show.

A quick example

The cabin earns more revenue and sells more nights, yet makes less money: its direct costs are almost double. Raising its minimum stay to cut turnovers, or adding a cleaning fee that covers the real cost, would do more for profit than chasing even higher occupancy.

Doing this in InnLedger

Every property you create in InnLedger becomes a department in its double-entry ledger automatically, and invoices, bills and journal entries carry that department — so step 1 is done for you, and each property's figures are kept apart in the ledger from the first posting. Owner statements total revenue and expenses per property, and the revenue report adds monthly occupancy, ADR and RevPAR from the same reservation data, with nothing to export or re-key.