Property Managers Payment Frequency

How often do most investor-owners receive the rent from their property managers who look after their property?

Is it more common for rent to be paid to the owner (minus the management fee) as soon as the tenant pays the manager?

Or is it more common for the manager to keep the money until the end of the month and pay an aggregation of the rent received during the calendar month?

Or some other payment frequency?

 

Usually monthly. Some do fortnightly.
If the tenant pays in advance, say 3 months, you get it all at once.

 

Usually monthly - gives the PM more time to deduct any other bills that may run through the agency.

 

This is important.

 

I prefer monthly. Some PMs will do fortnightly, but monthly is much more convenient.

 

Most agencies either do once or twice per month and it's up to the owner to choose if they want one payment at the end of the month or a mid-month (on or close to the 15th day of each month) plus end of month payment.

I presume that agencies with very large portfolios would have to disburse payments to owners even more frequently than two times per month. I have heard some of these agencies process creditor payments and owner payments every single day.

 

I give the owners an option of twice or once a month, most are happy with twice a month. It does sometimes take a bit of management to make sure larger bills are covered.

 

Traditionally, the standard is 2x monthly. However as software progresses that will eventually be a thing of the past.

There is software available that allows you to receive rent the instant the tenant pays rent, the agent simply clips their fee on the way through. In fact, this software does away with the agents Trust Account.

 

In NSW, it it the responsibility of the PM Licensee to authorise payments not the trust accountant.

 

We used to have one Owner who insisted on mid-month payment. But he has stopped asking maybe due to low interest rates. Or costing more for his Accountant haha.
Now all our Clients are on monthly payment. Gives us time to ensure all payments to Tradies and utilities can be paid...

 

I've heard QLD trust account laws are actually tougher than NSW, they have additional trust account laws apparently? Or maybe that doesn't apply to real estate?

 

Its strictly regulated but the Licensee has to now authorise all payments out of the trust account in NSW. Makes accountability fall on the licensee rather than them being able to blame staff for missing money!

and as per Bradley, There is now the wallet system that does away with trust accounts totally and is more of a paypal scenario. Tenant has a "wallet" and the owner has a "wallet". Funds are paid directly from the tenants wallet into the owners wallet with any fees removed at the time of transaction. This means an owner can have their rental money within seconds of the tenant paying it. It also means agents dont have to have trust audits every year as you dont actually hold any funds in trust. ( it does alot more than that in regards to funds and payments etc but the TLDR description is just that)

 

Just a small note to add...your PM has to disburse whatever is in the account at the time, they don't have a choice. Some people prefer monthly to ensure that there are enough funds to cover any accumulated expenses when this happens as otherwise it can result in late bill payments if the rental amount is low or the tenant is late with rent. You can also make a transfer into the PM trust account and ask them to place a hold on a set amount to cover this scenario if you prefer your rent being paid at a more regular frequency.

- Andrew

 

I offer weekly, fortnightly or monthly. Most go with monthly as they find it easier the track.

 

Our office has all the tenants pay monthly in advance, and disburse it to the landlord's (less management fees) once the funds clear. Most of the LL's I know have commitments to meet from the rent so we don't hold it any longer than necessary, and they also prefer 1 Statement a month rather than 2 or 4.