New! Automatically Calculate Management Fees for Owners

The vast majority of our users are either landlords that own, operate, and manage properties for themselves, or are property management firms that manage property and tenants on behalf of their clients (who typically own the property).  For property management companies, their fees are often derived from a percentage of payments received.  Prior to now, there wasn't an easy to have 123Landlord keep track of this.  You could have set up an expense entry for each month that was the result of you manually totalling your collected payments for that month, and you could have even set this is up as a recurring accounting entry (although it's rare you would know the total payment value collected beforehand).  This was a bit clumsy.

With this update, we've made this super simple.  We've built in support for property management companies that charge either a percentage or a flat rate per month.  We've also added the ability to base your fees on either collected payments, or on both collected & uncollected payments.  You can base your fees on either 'rent & non-rent charges' (so everything you've set up in the system), just rent & late fees, or just rent only.

Adding Management Fees

The first thing to do is to make sure you've got one or more owner records added, and you've added your properties, tenants, and leases under the correct owner.  You won't be able to use the 'None' owner for management fees.  If you've done this, you've been collecting your payments and generating payments due for each owner separately, and you can switch between owners to do data entry and run reports. More info about Owners here:

http://blog.123landlord.com/post/2011/12/30/Frequent-123Landlord-questions-moving-data-between-owners.aspx
http://blog.123landlord.com/post/2011/11/17/Move-a-Property-From-One-Owner-to-Another.aspx
http://blog.123landlord.com/post/2012/03/15/Run-Reports-for-All-Owners.aspx

If this is all set up and working how you'd like, you're ready to add Management Fees:

1. Click the Admin button to display the Admin page - you'll of course need to be an Admin user.

2. Select the 'Mgmt Fees' tab and click 'Add New'.

3. The New Management Fee screen appears:

Enter a descriptive title for the fee configuration, and select the Owner for which it will apply. You can select between a percentage based fee, or a fixed amount - in either case, enter the rate or amount.  For percentage based fee regimes, select whether this is calculated from collected or both uncollected & collected payments.  Also specify the type of payments used in the calculation (rent & non-rent, rent & late fee, or rent only).

Specify the date range for which the fee structure will apply.  Normally this would be for the entire year, or specific fee periods (quarterly, etc.) If you change your fees throughout the year, or only charge a fee for a certain portion of the year, specify it here.  You can add more than one Management Fee record for each owner, so you can create however many different ones that apply.  When you run the Management Fee report later, you'll specify a date range, and fee configurations you set up here that fall within that date range will be used in the report, so you have ultimate flexibility here.

4. Click Save.  You can add more if you have more than one owner to set up fees for (you should add at least one fee setup record for each owner you collect fees from, even if the rates are the same for all of your owners).

Once you're done setting up your fees, you can run the Management Fee report.

Running the Management Fee Report

1. Click the 'Reports' button.

2. Scroll down the bottom of the page, to the "Owners" reports, which contains the one report, "Management Fees":

3. You can have the report run 'as of' a specific date, for example - everything as of now.  Or, you can select a custom date range.  If you choose the as of date, the report will generate all fees based on the start and end dates of the management fee configuration set ups, up until the cut of (or 'as of' date) you specify.  If you select a custom date range, the report will pull management fees from your configurations that fall within that custom date range.

4. You can choose to show or hide the collected and/or uncollected amount columns.  This is handy if you've previously defined your management fees to be based solely on collected fees, for example, and therefore the uncollected column is irrelevant.  Special note: if your management fee is set up to be calculated from both collected AND uncollected amounts, but you chose to hide the uncollected column for example, the report might (correctly) show a fee total, but it might not be clear what the fee is based on (since the amount it is based on is hidden), and especially if the collected column is showing a $0.  In this case, the report will show a [1] footnote to indicate that the fee is based on an amount that is hidden by your report settings.

5. You can also choose to hide months with zero fees, and these will be suppressed in the report.

6. Click the 'Management Fees' report link, and the report is generated.

 

The report (like most of the other reports) is by default generated for the current owner selected in the 'Current Owner' button (top-right corner of most screens).  You can run this report for all owners by checking the 'Run for all owners' box and clicking Run Report again.  You can group the report by owner to show a owner name heading, with each owner's monthly summaries grouped together and totalled.  You can sort the report by various columns and fields as well.

Don't See Any Results in Your Report?

Make sure that your 'current owner' is not set to 'None'.  Also make sure that the date ranges of your report fall within the date ranges of one or more of your management fee setup records.  And finally, ensure that you actually have collected payment data (for fees that are derived from 'collected' payments) or you have created some leases that have become due (i.e. you have balances showing on the Payments --> Payments Due screen for those date ranges).