Today, we are talking about how we work with Santa Cruz owners on handling their money every month and what our process is for collecting and keeping security deposits. At Portola Property Management, we pay the owners the rent money we collect on or before the 10th of every month. We email a monthly statement and we also use ACH, which allows us to automatically deposit money into your bank account. That’s our preferred method of payment and accounting, but if you prefer we can print out a check and send everything to you through the mail.
In addition to emailing you a statement every month, we will send you a year-end statement as well and a 1099 that shows any income to you on your rental property. This will make your tax planning easy because you can simply hand the statements over to your CPA or whoever does your taxes. We can pay some of your monthly bills as well. For some owners, we take care of paying HOA fees, property insurance, landscaping costs, etc. If you have multiple properties on one utility, we can even pay the utility bill and then charge the tenants their portion. Any of these recurring monthly bills are easy for us to manage for you.
We hold all security deposits that are collected from tenants. The reason for this is that in Santa Cruz, we have to pay annual interest on those deposits. We pay that interest to the tenants. Also, the law requires that we return the security deposit to the tenants when they move out, with any applicable charges taken out, within 21 days. It’s important to have that money on hand and easily accessible at the time of move out. It can be easy for owners to forget that security deposit is in fact the tenant’s money. Many owners may not realize that we no longer collect the first and last month’s rent as well as a security deposit. That is actually illegal now, so we take only the first month of rent, which is prorated if necessary, and the security deposit.
Finally, we have an in-house maintenance company that we use for basic repairs. We outsource to vendors for larger projects such as new roofs, plumbing problems and other big issues. So, we can pay all of the maintenance bills on your behalf, either with money you give us or with money from rents. That will show up in your monthly statement as well. Our accountant is on staff, and we use a high-end property management software which helps us produce accurate accounting for you.
If you have any questions on property management accounting and how your money should be handled, please contact us at Portola Property Management. We’d be happy to talk to you.