Questions about Property Management Services

[James Stinnett]

Hello BP members!

I'm hoping to get some answers to the following PM questions I have, any insights would be greatly appreciated!

1.  Are most PM making mortgage payments for the owner; what percentage of owners have you making this payment?

2.  If the owners do not have an impound account for taxes/insurance are you also making these payments; again what %?

3. If they are having you make PITI payments and the rent does not cover this and fees are the owners sending you checks?

4.  What percentage of all payments made on behalf of the owners are electronic payments and what % snail mail checks?

I would expect that both PM and Owners could answer the questions above each with there own reasoning and insights so that would be helpful.  Again thank you for your time and help.

[Marcia Maynard]

We own and manage our own rental properties and not that of others, so I may not be qualified to answer your questions since we don't use an outside property management company. But here are my thoughts!

As the owner of quite a few rental properties, my husband and I would never allow a property management company to be responsible for making sure our mortgage (principal and interest), taxes, and insurance are kept current. We set up everything on auto-pay. Those important payments are made like clockwork. We're ultimately responsible if something should go wrong. We have those payments come out of our account between the 7th and 15th of the month.

Rents are received and deposited during the first six days of the month. Rent income can be directly deposited into our account electronically or received by us (or a designee) via our P.O.Box and deposited into our account. We have sufficient funds in our account at all times to cover our cash flow needs. If we are in danger of not having enough cash to cover our expenses, then we as owners add more of our own funds to the business and increase our equity, or obtain a loan to cover the need.

We currently receive our rents through regular post, mailed to our local USPS office (P.O.Box). We pick it up from there and immediately deposit the rents into our business checking account at a credit union three blocks away. However, checks from the Housing Authority (for our Section 8 tenants) come to us as electronic funds directly deposited into our account. We're in the process of transitioning to allow our tenants to pay their rent online through Cozy. When that happens, Cozy will electronically transfer the funds to our credit union account. We have several low income and/or elderly tenants who prefer to pay by check/money order and mail it to us. We're not inclined to change the status quo. It's working fine for us. Good long term tenants are worth keeping happy (some over 25 years!) We believe offering the tenant options that make paying rent easy works to our benefit.