Understanding Your First Three Months of Owner Payments

Getting started with a new tenant means a few up-front financial details before things settle into a steady monthly rhythm. This page is here to help you understand how the first two or three months of rent collection, fees, and disbursements typically work – whether your lease started on the 1st or some-time during the month.

Scenarios

Lease Starts of the 1st or Lease Starts on another day

Prior to Lease Start

Contingency fund: The contingency fund is requested and are due within one week of the management agreement execution (funded on the Owners Portal).

Management Setup: If your package includes a Management Setup fee, then it is requested to be paid (funded on Owners Portal) within one week of the management agreement execution.

Getting Rent-Ready Work: If there is rent ready work such as cleaning, painting, move-out costs, etc., estimates will be provided for rent-ready work and will need to be funded prior to work commences (via the Owners Portal).  It is best to fund all work in advance to make overall process as efficient as possible.

Optional Services: If optional services such as Surevestor, 3d tour, etc. are selected, they will start in the month that the agreement is signed and are due within one week of the management agreement execution.

Security Deposit: It is collected at lease execution prior to the lease start date and held in the tenant escrow account.  The lease is not fully executed until the security deposit is received and cleared.

Owner’s Statements

A owner’s statement each month at the time that the month is reconciled.  This is usually between the 8th and the 12th of the month.

Notes Regarding the Scenarios below

These are not intended to a comprehensive but only to show a simple example to help understand how moneys are accounted for in the first few months.   Your rent, leasing %, monthly management amount may be different than the examples below.  Additionally, other costs or incomes such as cleaning, pet rent, or other rent-ready projects will added to the appropriate month and accounted for in the Owners Statement.

Scenario 1: Lease Starts on the 1st

When the lease begins on the 1st of the month, the financial flow is straightforward. The first full rent payment is collected upfront, and deductions are made for leasing, onboarding, and setup costs.

Month 1: Lease Start Month

  • Security deposit is collected and held in tenant escrow at lease signing
  • Full Months’ Rent is Collected, prior to lease start on the 1st
  • Leasing Fee is deducted: xx% of one month’s rent as outlined in your agreement
  • Management Fee is deducted: Based on your selected plan as outlined in your agreement
  • Optional Services such as Surevestor
  • Depending on the rent, date of lease start and amount of fees, there may be a balance or funds to be paid to owner.
    • If funds are to be paid to owner, they will be processed most months between the 7th and the 10th in most months.
    • The first ACH payment to owner will take 5 to 7 days

Month 2: Lease In Progress

  • Full Months’ Rent is Collected on the 1st
  • Management Fee is deducted
  • Balance if paid to owner via ACH
    • Between the 7th and 10th of the month, the account is reconciled and payments processed
    • The first ACH payment to owner will take 5 to 7 business days.

 

 

Scenario 2: Lease Starts Mid-Month (e.g., the 20th)

To simplify payments, ensure the leasing fee can be paid and avoid a small first rent payment, we flip the rent collection order.  For example, if the rent amount is $2,100 and the lease start date is on the 20th of a 30-day month, the daily rent is $70:

  • Collect the full second month upon lease start date:  $2,100
  • Collect the prorated first month on the 1st of the next month: $700
  • Rent processing usually occurs three times per month.  The 1st time is around the 10th, the 2nd is around the 20th and the 3rd is around the 30th.  Depending on the lease start date, the rent processing will occur on the next rent processing date.  In this example, likely around the 30th of the month.

Month 1: Full Second Month Collected in Advance

  • Full Months’ Rent is Collected, prior to lease start on the 20th
  • Leasing Fee is deducted: xx% of one month’s rent as outlined in your agreement
  • Management Fee is deducted: Based on your selected plan as outlined in your agreement
  • Optional Services such as Surevestor are deducted
  • Depending on the rent, date of lease start and amount of fees, there may be a balance or funds to be paid to owner.
    • If funds are to be paid to owner, they will be processed on the next rent processing date depending on when the lease started.
    • The first ACH payment to owner will take 5 to 7 days

Month 2: Prorated First Month

  • Prorated Months’ Rent is Collected, prior to lease start on the 20th
  • Prorated Management Fee is deducted
  • Optional Services such as Surevestor are deducted.  Surevestor is not prorated.
  • Depending on the rent, date of lease start and amount of fees, there may be a balance or funds to be paid to owner.
    • If funds are to be paid to owner, they will be processed most months between the 7th and the 10th.
    • The first ACH payment to owner will take 5 to 7 days

Month 3: Your “Normal” Month

  • Full Months’ Rent is Collected on the 1st
  • Management Fee is deducted
  • Balance is paid to owner via ACH
  • Between the 7th and 10th of the month, the account is reconciled and payments processed

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