property management access to our checking acct?

Question

We just closed on our first apartment complex.  In the past we have done our own management.  This 24 unit apartment complex is out of state.  We have chosen a property management company we are comfortable with.  The property manager would like access to our banking accounts to deposit rent checks and also to pay any maintenance fees such as lawn care or general repairs needed.  I'm hesitant to allow access to our banking account even though I trust this person.  Can anyone tell me if this is common practice or are there other ways to provide access to funds for management activity?

Patrick Liska · Answer

I would not give them check writing control of your account. you can give them the account number so that they can deposit money in the account. they should collect all the rent, it then usually goes into their " general account" they then pay all the expenses for your property, after expenses are paid they then deposit the money in your account that is left over. every month they should supply you with a statement that shows all the income and expenses. That's how my PM does it and i am comfortable with. the only things i pay that they do not is my Mortgage and Property taxes, i like to personally make sure those are paid.

Daulton H. · Answer

Hard no.  Depending on the company maybe have them hold funds in escrow for repairs or capex.  I let my management company hold some funds for repairs.  Its in the contract with them.

Marysue Connelly · Answer

thanks for the detailed response.  Makes total sense.  I appreciate it.