Rental payment deposits
I have a new PM and wonder if its typical to the management to deposit tenant monthly rental payments on the 10th of the month instead of at very start of each month ? I find it a bit strange to get the checks that late in month, what do you think ?
I would think this would be normal, the tenant needs to submit payment and it needs to clear the bank which can take a few days. Often tenants feel rent isn't late until a late fee kicks in which can delay things a few more days so it seems reasonable for a 10 day wait. It will be easier on their accounting sending them when they have the majority of the money in for their rent roll vs. several deposits for each landlord. If it makes you feel any better, I use Zillow and it takes about a week to actually receive my money, tenants paid on the first through autopay and I got the money on the 7th.
As the previous post stated, this is normal. My current PM processes payments on the 15th and rent is late past the 3rd of the month. When I was self managing, I gave a 7 day late grace period but that was processing payments through a 3rd party to eventually put it electronically in the account. The more banks it has to process through means more time to get payment. This is part of the landlord business so it is completely normal.
#3 All Forums Contributor
- Investor
- Austin, TX
I use Colonial in Killeen, they deposit on the 10th
Quote from @Steve Tse:
I have a new PM and wonder if its typical to the management to deposit tenant monthly rental payments on the 10th of the month instead of at very start of each month ? I find it a bit strange to get the checks that late in month, what do you think ?
This is normal. The manager has to collect the rent, then pay any bills on your behalf, then prepare your monthly statement and make the payment. Keep in mind the tenant may not pay exactly on the first day of the month, which causes delays. Your PM should explain this in the PM agreement or on their website or something.
#3 Managing Your Property Contributor
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- Cleveland
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#3 Managing Your Property Contributor
- Real Estate Consultant
- Cleveland
Quote from @Steve Tse:
I have a new PM and wonder if its typical to the management to deposit tenant monthly rental payments on the 10th of the month instead of at very start of each month ? I find it a bit strange to get the checks that late in month, what do you think ?
VERY common, many tenants do not pay on the 1st, even if they do , it has to clear and PM has to reconcile the books. IE you owe for a repair or something. Also PM co cannot simple do wires every day, to time consuming. I PM about 500 doors, we pay 3 x a month, 10th, 16thish and 25th. Must give time for checks to clear, and again, check the books
All the best
@Steve Tse that is pretty standard. We pay most clients during the 2nd week of the month. There are many reasons why.
1) Tenant payments have been known to come back nsf.
2) We pay vendors the first week of the month.
3) Unlike most property managers we do not hold a owner's maintenance reserve. We have another bunch of reasons why. But basically accounting and we let owners hold on to that money.
4) We have learned not to 100% trust technology. You would be amazed how often the major software programs make little changes that mess up accounts. So we review every statement.
#3 General Landlording & Rental Properties Contributor
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#3 General Landlording & Rental Properties Contributor
- Property Manager
- Honolulu, HI
Quote from @Nathan Gesner:And NOT just from your property...they have many other Clients and may be collecting payments from hundreds of tenants. They likely also are paying dozens of vendors for repairs, as well as utility bills across numerous properties. It takes time to work them through the accounting process to ensure proper credit is noted.
Quote from @Steve Tse:This is normal. The manager has to collect the rent, then pay any bills on your behalf, then prepare your monthly statement and make the payment. Keep in mind the tenant may not pay exactly on the first day of the month, which causes delays. Your PM should explain this in the PM agreement or on their website or something.
I have a new PM and wonder if its typical to the management to deposit tenant monthly rental payments on the 10th of the month instead of at very start of each month ? I find it a bit strange to get the checks that late in month, what do you think ?