What Is a T12 in Real Estate and Why Do You Need One?

What is a T12 in real estate, and how should real estate investors track income and expenses to create an accurate & useful trailing twelve months report?

A T12 report in real estate, also known as a TTM or trailing twelve months, is a financial report that breaks down the income and expenses for your investments over the previous twelve months. This allows you to gain fast insights into your portfolio performance, identify areas for cost savings, and make smarter investment decisions.

The report can be generated at any time, and many investors generate it on a monthly basis. By consistently evaluating the numbers in this manner with an up-to-date trailing twelve months report, company financials can be evaluated both internally and externally. This makes it an incredibly useful report for investors wanting to leverage financial data to grow their portfolios. But, it is only useful if you keep your records accurate and up-to-date.

In this article, we take a closer look at exactly what a T12 for real estate is, and the best way for investors to track income and expenses so they can generate an accurate trailing twelve months when they need one.

What does TTM mean?

TTM, or trailing twelve months, is a method of evaluating financial data from the current month to the past 12 months. A TTM can be used to assess various financial metrics, including balance sheet items, income statements, revenue, and cash flow. 

Your TTM provides real-time and seasonally adjusted information on your real estate portfolio’s performance, unlike earnings reports that follow the financial year. While TTM returns can be more informative than annual returns, TTM data should only be relied upon partially, as numbers alone only tell part of the story.

A TTM is an essential tool for analyzing your financials and property portfolio’s recent performance. 

What is TTM yield?

TTM yield is a metric used to evaluate the income returned to investors over the last 12 months. Its versatility means it can be used for everything from ETFs to property portfolios. The TTM yield is calculated by taking the average yield of all the holdings within the portfolio, including stocks, bonds, or other funds.

Trailing twelve month/ T12 report in real estate

The Trailing Twelve Month (T12) report can be used in the real estate industry to analyze the performance of a property over the last 12 months of operation. It can be used to dig into an individual property asset or look at your whole portfolio. It's commonly used for multifamily properties, apartment buildings, and certain commercial rental properties with lease terms of up to 12 months.

The T12 report provides a detailed overview of a property's financial activity on a month-by-month basis and consolidates its economic performance into a single document. The report includes crucial information about the property's rental income, operating costs, tax-deductible expenses, concessions, and other relevant financial data from the past 12 months.

Different stakeholders in the real estate industry can use T12 data to make informed decisions based on their role and interests. For example, property owners, investors, and lenders can use the T12 report to evaluate the property's performance and make investment decisions, while property managers can use the data to identify areas for cost savings and operational improvements. 

What does a T12 in real estate look like?

Trailing twelve month real estate

You can instantly generate a trailing twelve-month report (T12) with Landlord Studio whenever you need one.

Landlord Studio's TTM report allows you to get a month-by-month breakdown of your property's income and expenses broken down by category and with a running net profit calculation.

Set the date range to go from the current month to cover the previous twelve. And filter the report by income and expense category and property. This allows you to easily analyze a multiunit property, an individual property, or the portfolio as a whole.

The running total of your net profit on a month-by-month basis allows you to quickly identify when you had large expenses and when rent was late. And on the right, it gives you the total for each income and expense category for the 12-month period allowing you to see where you’re over-spending.

Calculating trailing 12 months figures

To calculate Trailing Twelve Month (TTM) figures, you need to gather the relevant financial data for a given period, usually the last 12 months. The specific financial data that is used for TTM calculations can vary depending on what you are trying to measure.

Here are some examples of how TTM figures can be calculated:

  1. Earnings per share (EPS) TTM: To calculate TTM EPS, you need to gather the net income figures for each of the last 12 months and divide it by the number of outstanding shares.
  2. Revenue TTM: To calculate TTM revenue, you simply add up the revenue figures for the last 12 months.
  3. Gross profit TTM: To calculate TTM gross profit, you need to gather accurate figures for total revenue collected and then subtract the total operating costs.
  4. Debt to equity TTM: To calculate TTM debt to equity, you need to gather the figures for total debt and total equity for the last 12 months, and divide the debt by the equity.

* These examples are not real estate specific but can be used in a broader investment perspective.

It's important to note that TTM figures are always changing as new data becomes available. Therefore, it's essential to use a tool like Landlord Studio that allows you to easily and efficiently keep accurate and up-to-date financial records of your portfolio throughout the tax year. 

Create a T12 for your real estate portfolio with Landlord Studio

Landlord Studio rental accounting software

The easiest way to create a T12 for your real estate investments is to use a purpose-built software like Landlord Studio. In order for your report to be accurate and useful your accounts need to be kept up to date. However, as you likely already know this a isn't always easy.

With Landlord Studio we have a range of features designed to make your income and expense tracking as easy as possible.

  • Income and expense tracking on the go: Use our simple app to track all of your income and expenses wherever, whenever and never miss a deductible expense again.
  • Bank feeds: connect your bank accounts and automatically import your transactions so you can view and reconcile them in near real-time. With auto-match, rules and easy receipt uploading as well, it's fast easy and accurate. Learn more.
  • Receipt scanner: Scan receipts at the point of sale and the software will read and input the expense details for you. (Our bank feeds feature will then automatically match it the the transaction and reconcile it for you.)
  • Automated rent tracking: Use our rent collection feature to allow your tenants to pay online. They simply set it up once and the rent will automatically transferred directly into your account each month. Rent paid this will will then be automatically tracked in the Landlord Studio system.

With accurate books, you can instantly generate any of over 18 financial and property related reports including a T12 report. Gain fast financial insights and make tax time a breeze.

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