How does everyone handle rent collection + owner payouts?

Question

I’m curious how other landlords and PMs handle the timeline between tenant rent payments and owner payouts.

Here’s how our process currently works:

When tenants pay rent, the payment goes through our property management system first. It usually takes about 7 business days for the funds to clear. Then it takes another 7 business days to settle into our business account. After the funds clear, we review each property for:

• maintenance invoices
• management fees
• any approved charges
• overall accuracy of the month’s accounting.

maintenance invoices

management fees

any approved charges

overall accuracy of the month’s accounting.

Once everything is reconciled, owner payouts are sent by the 25th of each month. The goal is to make sure all payments have fully cleared, everything is accounted for, and there’s no risk of chargebacks or errors.

I’m curious — how do other landlords or PMs handle this? Do you send payouts on a set date? Weekly? As soon as the payment clears?

Drew Sygit · Answer

@Melanie Turner what software are you using?

While it can take up a calendar week, or 3-5 business days, for tenant ACH payments to clear their bank accounts, why does it take another 7 days for the funds to hit your account?

Make no sense!

Our PMC software allows us to set the number of days we want to wait for tenant payments to clear, before making them available for owner draws.

Why are you reviewing each property manually?

Our PMC software allows us to batch:

- Charge management fees- Pay owner draws

To avoid issues with funds for maintenance charges, we did have to create a "vendor" in the software named, "Hold for Approved Bid". We enter an "expense" under this vendor as soon as an owner approves a maintenance bid, so we don't send these funds to an owner on their next draw.

This setup allows us to efficiently pay owners on the 15th and last day of each month with minimal errors.

Adam Bartomeo · Answer

In my opinion, your timelines are much too long. We pay on the 15th of every month - owners, vendors, and us PMC. The only reason we pay on the 15th is not because of process issues, it is because 15% of tenants pay late rent. It also gives our vendors some time to get their invoices in. Paying on the 15th allows us to collect and payout 95% of rents for the month. We like to have 2 Fridays in the month, allowing the tenants 1-2 pay periods to pay the full rent. Paying on the 25th due to process/system issues is a LONG time.

Dale K Poyser · Answer

I agree with @Adam Bartomeo paying on the 25th is a long time to wait for rent. I have seen 5th to 10th as typical payout periods. You might want to add some automation and fees to get everyone to pay out and get invoices in sooner.

Sara Talamantes · Answer

I do monthly statements from (Previous month) 15th to (current month)14th and payout on the 15th. Example: November 15th - December 14th and payout on Dec 15th. Any invoices received after that time are paid via escrow funds I hold for each property or after the next rent is received.

Clare Pitcher · Answer

We are a PM in Milwuakee and we send out owner disbursements on the 6th and 15th of each month. Our tenants have between the 1st-5th to pay rent so if they pay on time the owner will receive rent funds (minus the management charge) on the 6th. If the tenant pays late we send out another one on the 15th so they don't have to wait until the following month.

Melanie Shiflett · Answer

Thank you for all the feedback! I'm very thankful for the insight to you all's processes.

Melanie Shiflett · Answer

thank you for that insight!

How does everyone handle rent collection + owner payouts?

How does everyone handle rent collection + owner payouts?

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