Owners Draw (Rent Disbursement)
Rent DisbursementsThis is the most common area of concern after a Client Management Agreement is signed: “When do I receive my money?” Disbursements to owners are labeled “Owner’s Draw” on your monthly statement, which you will receive at the end of each monthly accounting cycle through your Owner Portal. You will find more information about how to access your Owner Portal under the “Owner Portal” tab of your client onboarding notebook.
Incoming Rent and ProcessingTenant rent is considered late after the 1 st of the month, and State regulations allow for a grace period up to the 5 th of each month. Rent deposits are typically made the same business day as the rent check is received, and Real Property Management Solutions then confirms that the rent check clears before taking any further disbursement action. Once the transaction is confirmed, all utilities are processed and paid, and if there are any repair or maintenance invoices pending, they will also paid at this time, as well as reserve reimbursement. Your Owner’s Draw will be issued to you either by check or by Electronic Check (E-Check) on the 9 th or 10 th of each month. ACH disbursements will take two-to-three business days to clear through the receiving bank. Your receipt of a check by mail is dependent upon the postal service delivery times. We recommend you do not count on the renter’s first rent payment to make your mortgage payment. The rent disbursement cycle, along with the timing of a new tenant move-in is too tight in the first month to meet most mortgage due date requirements. Consequently, it is recommended that you have a month of mortgage payments in reserve to pay the first month’s mortgage payment.
How the Owner’s Draw is CalculatedThe calculation for the Owner’s Draw is fairly simple:
Monthly rent received:
- minus management fee,
- minus maintenance expenses if incurred,
- minus *other expenses such as utilities or landscaping when applicable,
- minus any of the reserve balance - if used
= equals Owner’s Draw.
*Further examples of “other expenses” may include, but are not limited to, additional advertising expense, monthly HOA, routine property reviews, seasonal services, and emergency maintenance costs that an Owner may request Real Property Management Solutions pay on their behalf.