Property management companies are similar to all other companies in that they will take out their fees first before releasing funds back to rental property owners. Many property owners expect to receive money back to them right away when new tenants move in, however usually that is not the case as it will be explained below.

If you have hired a property management company to only place tenants in your rental property you will likely receive money back from the funds they collected from your tenants at move in. Let’s say your tenants paid $1,000 for 1^st month’s rent, and $1,000 for the security deposit. The property management company’s fee is usually 1 month’s rent, so they will keep $1,000 and send you back $1,000. The $1,000 sent to you however is to be held in a bank account as this is the tenant’s security deposit and should not be spent.

If you hired a property management company to place tenants in your rental property and they are also going to manage your rental property, you likely will not see any money due back to you until the 2^nd month’s rent comes in. The property management company will deduct the tenant placement fee which is usually 1 month’s rent, an account set up fee, and month management fee. The remaining funds left will be held in a trust account as a partial portion of the tenant’s security deposit. When the 2^nd month’s rent is received, the remaining tenant’s security deposit will be held to ensure the full amount is held in a trust account, there will be a month management fee, and the funds left will be due back to you the rental property owner. Months going forward from there you will see the full month’s rent payment minus the management fee due back to you.