Why do you “hold” our rent income until the end of the month, before disbursing it to us?
By Nevada law, property management income/expenses are handled out of a trust account. This trust account combines funds of many different owners, although each owner’s property activity is accounted for separately. All too often, when owner proceeds are released a mid-month by other property management companies, a tenant’s rent payment will be reversed by the bank, after the proceeds have already been released to the owner. This event throws that one owner’s account into a negative balance status. Do you want your funds to cover the shortage in another owner’s account? We don’t think so. That’s why we are conservative in our accounting, and render month-end statements and proceeds, rather than mid-month.
There’s another advantage to this accounting method, too. In the event your tenant is late in paying the rent, you will know well in advance of the time you’re expecting the proceeds. If you’re depending on the rent proceeds to make your mortgage payment, with our system you’ll have about 3 weeks advance notice before you have to come up with the mortgage payment by other means. If you were hoping to make April’s mortgage payment with April’s proceeds, you would be stuck with only a few days advance warning before having to come up with that money yourself. (NOTE: For clients willing to maintain a larger reserve balance (equal to one month’s rent) in their accounts, proceeds will be distributed within three (3) business days of the date your tenant pays rent.)
Who holds my tenant’s security deposit?
Nevada law requires us to hold tenant security deposits in a trust account separately from owner funds.