Property Management

[ZLafferty]

Hi,

I have onsite property management for a condo purchased last year. Seeing as the year is up I have asked for some official paperwork for my accountant. The response from my Property Management was that no paperwork was required as we "profit" share. Can someone explain how or if this type of arrangement affects me negativly? I assume my Gross operating income would not include the "share" taken by my management guys. Any insight would be appreciated.

Z.Lafferty

 

[mikecunning]

Profit share? never heard of that...what does the property managemen tagreement say?

QUOTE (ZLafferty @ Feb 1 2009, 06:46 PM) Hi,

I have onsite property management for a condo purchased last year. Seeing as the year is up I have asked for some official paperwork for my accountant. The response from my Property Management was that no paperwork was required as we "profit" share. Can someone explain how or if this type of arrangement affects me negativly? I assume my Gross operating income would not include the "share" taken by my management guys. Any insight would be appreciated.

Z.Lafferty

 

[ZLafferty]

Mike,

Thanks for the acknowledgement. This comes down to a rookie mistake due to lack of experience on my part. I have no written Property Management agreement and all items were negotiated verbally.

When I purchased the condo the Realtor suggested a "home schooled" property management guy who had been working the building for 7+ years and managed 20+ condo`s. I think the point he was trying to get across was that I should not include a "management fee" under my operating expenses and that my gross operating income is really my annual rent minus his "profit sharing" management fee.

I would like to avoid any grey water and at this time think; although this was not what I expected still seems perfectly sound.

Am I losing out from a tax savings perspective as I would think the management fee`s would be deductable?

Property Management discussions inside these forums seem rare. I am hoping to come across more posts and discussion regarding the following:

1. What are the attributes of a good property management team?
2. What should be expected from Property Management? (Yearly/Monthly Statements, Occupancy for daily rentals, receipts for bills ect.)
3. What should be included in a typical property management contract?
4. Typical rates long term, vacation/seasonal property (BC,AB,ON)?
5. Experiences good/bad from forum members?

If anyone has links to other posts or external sites with good information it would be much appreciated. Any comments regarding my situation are appreciated as well.

Thanks,

Z.Lafferty

 

[Dan_Eisenhauer]

You absolutely need paper work and financials, even if you do "profit share".

However, it sounds to me as if your PM is scamming you. Get his version of the PM agreement IMMEDIATELY. If it does not coincide with your recollection of the agreement, RUN to your local real estate governing body AND your lawyer.

I do not often advise anyone to file complaints. But that is nothing more than BS. You have to take control IMMEDIATELY.