Collecting rents with a property management company?
Member since 2020 · 122 posts · 11 votes
Let's say my property rent not NOI is $1m a year.
All tenants pay online using an online service or app etc.
I have a property management company that I pay 10% so $100k.
As the property management company manages the property like the leases, finding tenants, repairs, maintenance etc do they collect the $1m paid to their bank account and I trust that they only take a $100k cut and pay me $900k or can I instruct them to set up the online service where all the rents are paid to me so I pocket the $1m then pay them $100k?
@Account Closed It is a business and you are trusting them with your investment. The money goes into their bank account and is then paid into yours. For my PM, they deposit the rent into my bank account on the 15th of the month while the tenant pays on the 1st. This gives the PM time to deduct any expenses (repairs) and ensure the payment from the tenant clears.
It's highly unlikely with that much gross rents you will be paying 10% management fees. Also you wont hire a company off the street. Needs to be Highly vetted and recognized..
Ok. What I want to know is whether all the rents goes to my bank account or theirs? Even if the company is highly vetted and recognised isn’t it risky for them to collect all your money then trusting them to only take their cut and give you yours.
All the property management that I dealt with had the rental income deposited into their account not mine. It was 10s of thousands a month. You might find some small time companies that might meet your demands.
What percentage management fee did they charge?
I’m assuming that they took their management fee and paid you the remaining majority.
My issue is that even if the management company is reputable since the money is going to their account they could take all the money.
Can’t you tell them to deposit all the rental income to your account since your the landlord then pay them their cut? That’s more safe and professional is it not. Especially if the payments are online so they can manage with ease.
@Account Closed It is a business and you are trusting them with your investment. The money goes into their bank account and is then paid into yours. For my PM, they deposit the rent into my bank account on the 15th of the month while the tenant pays on the 1st. This gives the PM time to deduct any expenses (repairs) and ensure the payment from the tenant clears.
@Account Closed It is a business and you are trusting them with your investment. The money goes into their bank account and is then paid into yours. For my PM, they deposit the rent into my bank account on the 15th of the month while the tenant pays on the 1st. This gives the PM time to deduct any expenses (repairs) and ensure the payment from the tenant clears.
I was just worried in case they steal the money. I was thinking couldn’t all rental income go to me then I pay them their fee. But of course trust.
All the property management that I dealt with had the rental income deposited into their account not mine. It was 10s of thousands a month. You might find some small time companies that might meet your demands.
What percentage management fee did they charge?
I’m assuming that they took their management fee and paid you the remaining majority.
My issue is that even if the management company is reputable since the money is going to their account they could take all the money.
Can’t you tell them to deposit all the rental income to your account since your the landlord then pay them their cut? That’s more safe and professional is it not. Especially if the payments are online so they can manage with ease.
They managed 70 units for me and agreed to 7.5%..
10% is like for like 1-5 units.. you need to allow them to manage more units to lower the cost..
It's harder for them to scam you and run away if they are using a management platform like buildium and appfolio.. unless they do some manual overrides but at end of day it come down to credibility.. is it worth it for them to scam you and lose license and business?
All the property management that I dealt with had the rental income deposited into their account not mine. It was 10s of thousands a month. You might find some small time companies that might meet your demands.
What percentage management fee did they charge?
I’m assuming that they took their management fee and paid you the remaining majority.
My issue is that even if the management company is reputable since the money is going to their account they could take all the money.
Can’t you tell them to deposit all the rental income to your account since your the landlord then pay them their cut? That’s more safe and professional is it not. Especially if the payments are online so they can manage with ease.
They managed 70 units for me and agreed to 7.5%..
10% is like for like 1-5 units.. you need to allow them to manage more units to lower the cost..
It's harder for them to scam you and run away if they are using a management platform like buildium and appfolio.. unless they do some manual overrides but at end of day it come down to credibility.. is it worth it for them to scam you and lose license and business?
Alright I understand.
Was rent collected online? If so what platform? How did you make sure the property manager gave you your money? Online system? Etc
All the property management that I dealt with had the rental income deposited into their account not mine. It was 10s of thousands a month. You might find some small time companies that might meet your demands.
What percentage management fee did they charge?
I’m assuming that they took their management fee and paid you the remaining majority.
My issue is that even if the management company is reputable since the money is going to their account they could take all the money.
Can’t you tell them to deposit all the rental income to your account since your the landlord then pay them their cut? That’s more safe and professional is it not. Especially if the payments are online so they can manage with ease.
They managed 70 units for me and agreed to 7.5%..
10% is like for like 1-5 units.. you need to allow them to manage more units to lower the cost..
It's harder for them to scam you and run away if they are using a management platform like buildium and appfolio.. unless they do some manual overrides but at end of day it come down to credibility.. is it worth it for them to scam you and lose license and business?
Alright I understand.
Was rent collected online? If so what platform? How did you make sure the property manager gave you your money? Online system? Etc
50/50 online and money orders
They send me ETF on the 20th straight into my account