Property Management as a Real Estate Agent
I'm working with a small firm with a broker that hasn't done any property management before. He's willing to let me do some property management, but I have some questions about this easiest way to set this up for my broker.
What's the best way to set up rent payments? My thought would be to manage payments through a platform like Buildium or Doorloop and to distribute rents payments directly to the owners and then to invoice owners quarterly the fees that they can then pay to the brokerage. The brokerage would then take it's split and pay me.
My old broker did property management already, so it wasn't a big deal. I like my current broker, so I'm trying to make this as easy as possible for him! Are there any agents out there doing property management this way? Suggestions and experience would be appreciated!
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Real Estate Agent Tennessee (#355813)
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#2 Real Estate Agent Contributor
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#2 Real Estate Agent Contributor
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One place to start might be with your E&O insurance provider to see what requirements they have if any.
PM is one of the highest risk parts of real estate to be involved in....so you want to make sure to do it right.
I like your idea...I think most PMs probably want to collect their fees monthly, but if you have owners you trust to pay you quarterly, that seem like a win for both you and them. Are you going to do the same quarterly billing for trip charges and maintenance? That could create negative cash flow for you and put you at some risk of non-payment if you let it ride that long.
You might also look at hemlane and erentpayments to see if there are any options for you there or even square.
#2 Managing Your Property Contributor
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#2 Managing Your Property Contributor
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Would never have rents go directly to owners and then trust them to pay their PM fees.
Many owners try to pay for repairs by telling PMC's to take it out of future rents.
Starting with Buildium would be a cost-effective way forward.
@David Goodman Hi David. I'm attempting to structure a similar setup with a Broker here in FL. I'm curious on what you decided to do, and also if you could give any insight to how you structured the commission split.