If you're managing short-term rentals (STRs), your Profit & Loss (P&L) statement isn’t just for tax prep - it’s your business blueprint. Done right, it shows exactly how money flows through your company, where you’re making margin, and where things might be leaking.

Here’s how to interpret a P&L for a property management business with about 80 units, broken down section by section.

Income: Focus on What You Actually Earn

A common mistake is including revenue that belongs to the property owner. Your company’s P&L should only show income your business earns (this excludes anything passed on to the owners, like booking revenue).

Typical income streams include:

• Management Commissions - Charged to homeowners as a percent of rent
• Cleaning Fees - Paid by guests, retained by your company (varies by company, but this is the way we recommend handling it)
• Other Guest Fees - Includes:
  • Damage waivers
  • Early or late check-in fees
  • Pet and processing fees
  • Resolution payments
• Onboarding Fees - Charged to new owners during property setup
• Technology Fees - Monthly charges passed to owners for software tools

Tracking each line separately gives you clarity on revenue drivers and allows you to benchmark against industry norms.

Cost of Goods Sold (COGS): Track What Scales With Bookings

COGS includes all variable expenses - costs that rise or fall with reservation volume. This section helps you measure service profitability.

Key categories:

• Housekeeping Labor - Turnover cleans are usually the biggest COGS line
• Supplies - Think toilet paper, dish soap, trash bags
• OTA/Channel Commissions - Fees charged by booking platforms or payment processors (this tracks with Processing Fees in revenue)
• Rental Insurance Premiums - The cost of offering damage waiver protection to guests

What to watch:

• Cleaning fee income vs. housekeeping labor cost
• Damage waiver income vs. insurance premiums

These comparisons tell you whether your pricing makes sense.

Operating Expenses: Your Fixed Overhead

These costs stay steady month to month, no matter how many bookings you have. They show what it costs to “keep the lights on.”

Main categories:

• Advertising & Marketing - From Google Ads to referral payouts
• Insurance - Coverage for your business (not guest-related)
• Legal & Professional Fees - Includes accounting, legal, and consulting help
• Payroll - Wages, taxes, and payroll processing if you have in-house staff
• Software & Apps - Tools like your PMS, dynamic pricing, and messaging platforms
• Miscellaneous - Meals, travel, office supplies, and utilities

These are the costs you need to monitor for overall profitability and budget planning.

Other Income & Expenses: One-Off or Non-Core Items

This final section includes things that don’t happen every month but still affect net income.

Examples include:

• Other Income - Credit card rewards or rebates
• Other Expenses - Conferences, education, or donations

Tracking these separately gives you a cleaner view of your core business performance.

Use Your P&L to Guide Strategy

A monthly P&L tells you much more than your annual tax return. You can:

• Identify underperforming service lines
• Adjust pricing based on actual margins
• Justify tech fees or onboarding charges
• Keep owner payouts aligned with your real costs

And perhaps most importantly - it helps you scale with confidence.

FAQs

Should cleaning revenue appear on owner statements?

No. If your company retains cleaning fees, they belong on your business’s P&L, not on owner statements.

Can I include guest booking revenue?

Only if you're using a rental arbitrage model. For most property managers, this revenue belongs to the owner and should be tracked in a trust account.

What’s a net income margin?

It varies, STR property managers should aim for 20-30% of revenue.

Want a Clean, Clear P&L?

At Keystone Bookkeepers, we help STR managers build and understand financials that support better decisions. From monthly reporting to full trust accounting support, we make sure your books help you grow.

Get in touch to learn more.