When you are selecting a property management company, there are four key things you want to ask about how your finances will be handled. Make sure you are ready to discuss these important issues during the course of your interviews, because knowing how you will receive your rent and pay for expenses before you sign a contract will save you a lot of time and frustration down the road.
Rent. The most important thing you will need to know is when you can expect to be paid your rent. Find out from the property manager when rent is due from the tenant, and how long it will take for that money to hit your account. Most property managers understand that you have a mortgage to pay and expenses to handle. Ask if you can expect to get paid in the middle of the month, or towards the end. Assuming the tenant pays on time, you should expect to receive your rent from your property manager between the 10th and the 15th of every month. Another good question to ask is how the tenant pays rent. Is there a direct deposit system set up, or does the tenant drop it off?
Deposits. Always ask the property management company you are interviewing how security deposits are held. You’ll want to make sure there is a trust account or some kind of bank account separate from the business account that holds deposits.
Reserves. Ask your property management company if they require a reserve, and if so how that money is kept. Some property management companies do not require reserves. At Ravago Group Property Management, our vendors work with us on a net-30 basis. This means that if there are any expenses we need to pay for on your property, we can take that payment out of the next month’s rent. Therefore, we always recommend having a little money in your reserves for unexpected expenses, but we don’t require it.
Maintenance. You’ll need to know how your maintenance and repairs are paid for. At Ravago, we always communicate with our owners on everything, even the smallest expenses. We will text or email you to let you know there has been a repair request or a small maintenance item has been taken care of, such as a new garbage disposal or a replaced sprinkler head. If a repair is over $200, we will have a more in depth conversation. For example, if an air conditioning unit has to be replaced, we’ll talk to you about how many bids we are comfortable getting, what the scope of
work should be and other details that affect the price and the work. Ask your property manager how much input you will have in these financial decisions.
If you have any questions about how your money should be handled by your property management company, please contact us at Ravago Group Property Management, and we’d be happy to provide more information.