Rental Revenue Overview
Rental revenue refers to the income generated from renting out a property or asset. It is earned by landlords who allow others to use their property in exchange for regular payments. Rental revenue can come from various properties like homes, buildings, apartments, vacation rentals, and land.
Recognition of Rental Revenue
In accounting, rent revenue represents the rent earned during the period on the income statement. The account "Rent Revenue" is also called Rental Income. Rental revenue should be recognized when the rent is paid by the tenant to the landlord or property manager.
Calculation and Presentation of Rent Revenue
How do you calculate the revenue per available room? Gross Rental Income is the equivalent of business revenue. It is calculated by multiplying the monthly rent by 12 (i.e. one year) and then factoring in the vacancy rate.
Rent Revenue is the title of an income statement account that indicates the amount of rent earned during the period. It is also known as Rental Income. Rent expenses are costs incurred by a business to generate revenue and are recorded on the income statement.
Unearned rent revenue is a temporary account that closes at the end of each accounting period, with balances transferred to the income statement. It is included as a liability under “current liabilities” on the balance sheet.
Rent expense is considered an expense, not revenue. It represents the cost of occupying a property necessary for business operations and impacts a company’s profitability. Rent expense is typically categorized as an operating expense and does not appear on the balance sheet.
Deferred rent revenue can be recorded when rent payments are made in advance. Once the revenue is earned, the Unearned Rent Revenue account is reduced, and the Rent Revenue account is increased.