Collecting payouts as a property manager(management/cleaning fee)

Collecting payouts as a property manager(management/cleaning fee)

Real Estate Agent · Hampton, NH · Member since 2022 · 7 posts · 4 votes

My business partner and I started a property management company this past year after managing a friends airbnb/VRBO. There was a little bit of flexibility in terms of how we collected money with our friend at the time but as we have received inquires to manage other properties we are trying to find the best way to split payouts with property owners. 

Currently, the property we manage is listed in the owners airbnb account with us as co-hosts. We collect a 20-25% management fee + cleaning fee which we pay directly to the cleaners from our business account. Airbnb/VRBO payouts have gone to the owners bank account and then they write us a check for every reservation that includes our 20% + cleaning fee. Logistically, this creates too much work for the owner to have to write checks constantly and we are trying to make their life easier. It worked with our friend but we realize it won't work moving forward with other homeowners.


Looking for recommendations on what others do when property managing others STR? Here are a few possible solutions we have thrown around:


Option #1: Airbnb allows for split payouts. The shortfall of this is that they do not allow you to designate where the cleaning fee is paid out. The cleaning fee is lumped into the total payout. Logistically, this makes it hard to charge a flat 20% as we are collecting a portion of the cleaning fee and they are too. Who pays the cleaner then? Also, not every hosting platform allows for split payouts and it will be tricky to manage different platforms with different payout options.

Option #2: We collect the entire payout and list properties on our business airbnb account. We pay the property owner their portion monthly. This seems the most seamless 

Option #3: I haven't found one but is there a hosting tool that collects payments and allows you to choose how to split it up and automatically payout property owners? 


Appreciate any and all advice or insight into processes others have found success in! Thank you for your time. 

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Rental Property Investor · New Hampton, NH · Member since 2017 · 52 posts · 36 votes
4y

@Jacqueline Mee Hi Jacqueline, be very careful with with this. NH you are required to be at least a Licensed Real Estate Salesperson, or more importantly, a bonded and insured Broker, to handle clients monies managing rental properties. Also, aside from Airbnb, you need to pay state Meals and Rentals Tax per booking. Happy to help if needed, just wanted you to be aware.

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  • Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
    4y

    You need to move to a property management software. I use Ownerrez for my property management company. I would do a demo with them and move to a PM model with trust accounting. 

  • Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    4y

    I manage my own properties, and collect rent personally from each STR. Maybe you can do the same thing? Tenants pay in cash or with a credit card that I utilize my Square reader for. You can remit the owners portion to the owner.

  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    4y

    Option #2: We collect the entire payout and list properties on our business airbnb account. We pay the property owner their portion monthly. This seems the most seamless

    What did you have to do to get legally certified to manage properties for others?

  • Real Estate Agent · Hampton, NH · Member since 2022 · 7 posts · 4 votes
    4y

    @John Underwood Hi John, the state I live in (New Hampshire) doesn't require certifications to manage rental properties. It is my understanding that this varies from state to state. 

  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    The tried and true method is for the property manager to collect all fees, pay the expenses, collect their fee, and then pay the remainder out to the owner along with a monthly statement.

    The DIY Landlord Book4.7247 Reviews
  • Rental Property Investor · New Hampton, NH · Member since 2017 · 52 posts · 36 votes
    4y

    @Jacqueline Mee Hi Jacqueline, be very careful with with this. NH you are required to be at least a Licensed Real Estate Salesperson, or more importantly, a bonded and insured Broker, to handle clients monies managing rental properties. Also, aside from Airbnb, you need to pay state Meals and Rentals Tax per booking. Happy to help if needed, just wanted you to be aware.

  • Real Estate Agent · Hampton, NH · Member since 2022 · 7 posts · 4 votes
    4y

    @Kyle Lacasse Thanks, Kyle! Appreciate your insight into NH specifically. I did some research on this and read contradicting things but mostly that there are no licenses required? Fortunately, I am enrolled in courses to become a Licensed Real Estate Salesperson. Regarding the taxes, Airbnb usually collects state Meals/Rentals on their end. Are there additional collections we need to be making? Once again, appreciate your insight!

  • Investor · Hillsborough, NH · Member since 2015 · 137 posts · 126 votes
    4y

    @Jacqueline Mee -

    @Kyle Lacasse is correct per my understanding, which is as follows:
    You need to be a licensed broker to manage rental properties for others (or an agent working under a broker).
    This does not apply if it is your own property, or you are a member or employee of an entity that owns the property.

    That's my simple understanding since I don't manage properties for others and therefore have never looked into it deeply.

    Happy investing,

    Troy

  • Property Manager · Branson Missouri · Member since 2022 · 73 posts · 51 votes
    4y

     I own a nighty rental Property manager that manages over 200 properties.  My suggestion to you is to set up your processes now so that you are scalable.  As mentioned by @Leslie Anne Morris you should use a PMS system that can scale as well.  In regards to the funds you will need to collect all funds and fees and then disperse after the 1st of the month to your owners.  You can get the OTA sites turned over to you.  You will need an operating bank account and a trust bank account.  Good luck and happy growing.    

  • Real Estate Agent · Hampton, NH · Member since 2022 · 7 posts · 4 votes
    4y

    @Valerie Budd Thank you so much for your insight here. Is there a PMS that you use/would recommend? 

  • Property Manager · Branson Missouri · Member since 2022 · 73 posts · 51 votes
    4y

    @Jacqueline Mee  We use Streamline PMS.  In fact I just came back from their annual Streamline Summit that is held annually for their PM's to show us new tools available.   

  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    @Jacqueline Mee for the short term (!), you & the owner should be on the same bank account so you can both access. You can pay expenses from it, including your own management fee.

    Long-term, you want to put everything under your STR accounts as already mentioned.

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