Property Manager Wants Bank Account Access
Hello Bigger Pockets Community,
I have some multi family properties (total of eight units) and the property management company has a shared bank account so they can deposit rents and then debit expenses with co-sign ability. They recently overdrafted my account because they claimed there weren't enough available funds for expenses (had over $2,000 in account at the time), so they're now saying they would like there to be one months rent or security deposits to be kept in the bank account at all times (roughly $5,000). I don't like the idea of leaving security deposits with them because they don't keep it in a separate account. They leave it in the same account and then draw funds out of it when they need to for expenses which seems to defeat the point of a security deposit, unless of course the expenses are related to move out. This is why I removed the security deposits and placed them in a separate account that only I have access to.
1. Does any of this seem normal? How much money would it be advised to leave in the account for this situation? I already don't like that they have co-sign ability. Having more than $1,000 in the account seems high to me. To me it seems to make sense to withdraw as much left over money as possible so it can be reinvested or sit in an interest-bearing account.
2. I have a $300 threshold for expenses per property and if that get's used I refund it, although they tend not to notify me of expenses in the first place that go over and also don't tell me when a unit is turning. But since there's two properties, I keep about $600-800 per month in the account for expenses at all times, sometimes more. Is this not enough? How much should I leave in the account for the management team?
3. Moving forward, what would be advised for an agreement with a property management company for paying bills?
It seems like there's a lot of red flags here but I'm trying to see if I'm overlooking something or if they way they are operating is normal in the property management space, although from what I've seen it seems most companies pay bills out of their own pocket first and then deduct that from rental income before sending payment to the owner.
Many thanks for your input!
