Documentation / Accounting / Management Fees

 

Management Fees

If you use Greenhouse PM to manage rental properties for 3rd-party owners, you'll be glad to know that we've provided an easy way to automatically record rate-base management fees every time you receive rent.

What exactly is a Management Fee?

If a property owner is paying you to manage their rental properties for them, the fee you charge the owner to do so is your Management Fee. This fee represents an Expense for the property owner, and an Income for you the property manager.

How do I configure automatic management fee calculation?

*This option is only available to the Greenhouse PM Account Owner (the individual who registered the initial Greenhouse PM account). Additional users added will not see this configuration option.

Once you've logged into your Greenhouse PM account, go to Account Settings > My Account. From there, you will see a section labeled "Enable Automated Management Fee Calculation". Check the "Automatically calculate management fees" checkbox and more options will appear.

You can now specify your Fee Rate and Fee Minimum. The Fee Rate is the rate you charge at baseline for managing the owner's property rental, and the Fee Minimum specifies the minimum charge required. To see this in action, consider this example:

  • Your Fee Rate is 10% and Fee Minimum is $60
  • "Unit A" is leased at $750/month
    • Your calculated management fee will be $75
  • "Unit B" is leased at $500/month
    • Your calcualted management fee will be $60

Next, you simply need to specify the Manager accounts to use for recording the Credit and Debit transactions. You are free to utilize the provided accounts "1510 - Bank / Cash - Bank Account (Internal Use Only)" as your Bank Account, and "4500 - Income - Management Fees" as your Income Account. If you'd like to use different accounts, you must first create new Manager accounts via the Chart of Accounts.

Contact Support If You Have Questions

As always, please contact Greenhouse PM Support at support@greenhousepm.com if you have any questions concerning automated management fee transactions. This is a fairly complex feature that needs to be understood completely prior to implementation.