Understanding Management Fee Payment Options | Overview

Rentec Direct allows you to automate the posting of management and placement fees (commissions). Fees post to the property and owner ledgers as they accrue, ensuring they're consistently deducted without manual entry. This also prevents management fees from being included in owner disbursements and allows you to pay them out later, such as monthly payouts to yourself or other managers.

How the Process Works

Think of management fees as withheld until you decide to pay them.

• Fees automatically post only to the property ledger based on how they're configured:
  • Monthly flat rate
  • Percentage of tenant payments
  • Percentage of charged rent
  • One-time placement (commission) fee
• The bank ledger is updated only when:
  • Pay yourself
  • Pay other managers or
  • Record that funds were transferred to another account

What This Looks Like in Practice

Here's a common example:

• A management fee is set to 10% of tenant payments
• A tenant pays $2,300
• $230 (10%) is automatically recorded as a management fee to the property ledger

On the property ledger:

• The rent payment appears as a credit
• The management fee appears as a debit
• Within the transaction
  • Bank and Payee display None because the fee hasn't been paid out yet

In the owner portal:

• The management fee is deducted from income
• This prevents the fee from being accidentally included in an owner disbursement

Paying Out or Transferring Management Fees

When viewing the bank ledger, only the rental income credit appears. Management fees are calculated behind the scenes until you choose to pay them.

When you pay yourself management fees or paying out management fees to other managers:

• All unpaid management fees tied to that bank will be available to pay
• The property field will appear grayed out since the transaction already exists on the property ledger
• Select a payee and complete the payment without creating duplicate entries

When viewing the bank ledger, only the credit from the rental income is reflected (the management fee is calculated behind the scenes for when or if you choose to pay them).

After selecting Pay Property Manager, all management fees attached to that bank will be available to pay if you'd like.

When creating the payment, the property will be grayed out as the transaction is already reflected on the property, and the payee can be selected. to prevent a duplicate transaction on the property.

Setup Options

If You Keep Fees or Pay Yourself /Your Company

When adding a property:

• Assign yourself or your company as the Property Manager
• Set up management and placement fees

If You Pay Out Management Fees to Other Managers

Before adding properties:

• Add managers to your account
• Create a unique management fee expense category for each manager (for tracking).

When adding a property:

• Assign managers to properties
• Set up management fees
• Select the appropriate expense category for each manager

Fees will automatically calculate on the property and remain ready to be paid or transferred when you choose.

Tips for Accurate Payouts

Before paying out or transferring management fees:

• Print the Property Manager Rents Report to verify amounts
• Make corrections as needed
• Attach the final report to the payout transaction for reference

After payment:

• Print a Category Ledger Report for the management fee expense categories
• Confirm the totals match your payments

Important

Once a management fee has been paid out, it cannot be deleted. Always review reports carefully before issuing payments.