Property Management Payout

6 Replies

Is it normal for a PM company to collect your rent in one month (Feb) and not pay you the owner until they do their monthly statement at the start of the next month (March)?

This is my first time using a PM and it doesn't seem right for them to hold your fund until the next month! 

@Tony Spears Depends on the company and the contract but I always did it this way unless I either received a retainer or had control of the property owner's checkbook. As a PM, this gave me some level of protection against paying my vendors for repairs at properties and either not getting reimbursed or having a ton of my own cash paid out over potentially 100's of properties.

Regardless, this is something that should have been discussed with you upfront.

While I do pay out to the owners the same month the rent is collected, there is actually a benefit to you by waiting till the following month. That is, if your PM company is sending you the payment after all the expenses are paid for the previous month, then you always have a clean and simple monthly statement. The way I do it, there might be some expense right after I send a payment, but that's not going to be reflected till the next month. 

As others said, you want to check what the agreement says. 

@Tony Spears yep, normal in my market. The pm may need to pay utilities, insurance, lawn care, etc. expenses mid month, and they prefer to use your money not theirs. But of course it depends on the pm agreement as others have said.

Was the rent paid on the first?

Sometime a tenant moves in on the 10th, pays on the 10th- that payment would not be paid until the following month since the Funds will not have cleared by the time all the owner owners are paid for Feb.

Next month you will get the Feb and march funds. 

Thanks to everyone for sharing information to give me a better understanding of working with a PM company. I have self-managed for years with local properties but now that I'm investing out of state this is new to me! Thanks again!!