Lease option with Property Management

[Demetrius Clayton]

I’m fairly new to real estate investing so this might seem obvious but let’s say you turn a property into a lease option and you have a property management company find a new tenant for you I know that you pay them their fee however what about the down payment from the tenant what happens with that when you use a property management company to find a new tenant when the original lease option tenant has left is that fee put into the property management contract you sign initially how exactly is that dealt with?

[Anna Sagatelova]

Hi Demetrius, it sounds like you may be asking about who gets that down payment fee, you or the property manager?

It would depend on your contracts, first the lease option contract between you and the tenant/optionee as to what happens to that deposit if they fail to purchase the property by the stipulated deadline. And second, the property management agreement between you and your PM.

Now, in a reasonable world, both of these contracts would be structured so that you, the owner, keep that down payment fee in full. 

Good luck!