I've been scouring the archives to try and find this answer but I have yet to see it - I'm hiring a property manager for my out of state investments, so should I have my renters make checks out to the property manager / property management company name? Then once checks and cash are collected the property manager takes out their fee and sends me a check from the PM company for the remainder of the balance?
Or should I have the rent checks made out to me (the owner) and cash forwarded to me either in form of money order or check in the amount of cash from the PM company, and then I get billed and make a payment to the PM company for their services?
I don't mind doing either, I just want to make it as smooth and easy as possible each month so wanted to gather some input as to what you feel would be best.
I collect rents on behalf of my clients and remit them the net funds (net of management fees and any incurred property expenses) on a monthly basis.
@Kyle Kelley The property management company should handle the collection of rents and everything else. They should be able to tell you how all of this will operate. Have you already chosen a company?
I haven't yet had to use a property manager for my residential rentals, but my understanding is that they will collect rents, security deposit, handle maintenance calls, etc. and apply everything to your account. You should get a statement each month itemizing all income and expenses (including their fee to you) and they will direct deposit the funds to you.
But I am sure that someone more familiar with using PM could steer you better.
Rents made out to the PM then PM takes out fees, pays invoices etc then sends owner disbursement.
@Dan DeMott So if I understand correctly that means the checks are made out to your/your companies name then? I apologize for my lack of understanding the terminology but just want to make sure I am understanding correctly :)
@Beth L. Yes, I have a company and that is what we have tentatively agreed to (they take care of basically everything - running bigger repairs by me first but other than that basically everything at their discretion). Just want to make sure that putting the rent checks in their names is not a silly thing to do - we will have a contract that outlines everything, but again, its technically my first rodeo here with PM so I figure better to be safe than sorry :)
Thank you @James Wise !
Hi @Kyle Kelley , yes, sorry for the brief reply in my previous post.
As Beth and James covered, it is fairly standard for tenants to make payments to the manager directly and the manager will send the net payment to the owner.
Good luck and keep us posted.
Thanks will do!
@Kyle Kelley yes, the tenant makes the check out to my company. Then, I deduct my fee and any maintenance expenses that I paid for the month, and then I direct deposit the balance into the owner's bank account.
Definitely, let the PM collect the rent. You are already paying him/her for the convenience of not having to deal with chasing down tenants, payments, etc. All you should have to do is cash the net income check each month and make the big (repair, renovation) maintenance decisions as well as approve new tenenats
PM should collect the rent and send you the net after management fees, repairs, etc.
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