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All CollectionsRentals (Property Managers)Getting StartedModule 2: Automate Accounting
Set Up Your Management Fee Policy
Set Up Your Management Fee Policy

Calculate management fees and assign management payout accounts to create and pay management fee bills.

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Written by Samuel
Updated yesterday

Overview

Management fees are the charges that a property management company levies for overseeing and managing rental properties on behalf of property owners. These fees compensate the property manager for their services, which include tasks such as finding tenants, collecting rent, maintaining the property, and handling of tenant issues.

If you charge management fees, DoorLoop can help calculate the fees and create bills for you. You can either configure the default management fee settings for all of your properties, or a specific property can have unique management fee settings.

Note: Management Fees are not available to Starter Plans. Consider upgrading to the Pro or Premium Plans to access this feature.

The Steps

Configure Company Default Management Fee Settings

Company default management fee settings allow you to configure a management fee rate for your properties to use. If you have unique management fee rates on each of your properties, follow the instructions here: Set Up Your Property-Specific Management Fee Policy

  1. To set up your company default management fees settings, click Settings on the main menu and then click Management Fees under the Property Settings section.

  2. On the Management Fees window, under the Payment Recipient section, select the appropriate vendor (your property management company) in the Select Vendor dropdown menu.

    (Be sure to set your property management company as a vendor first. Click the + Create New button in the upper left corner of the screen to add the vendor before configuring management fees. Read this article on how to add a vendor.)

  3. In the Set Up Your Management Fee Structure section, start off by clicking the + Add Fee button under the Configure Management Fee section. You will have three choices here when selecting your fee type:

    • Percentage of charges posted (Accrual Basis)

      • If your fee is based on the charges to the tenants, regardless of their payments, pick this method. This will calculate the fee as a percentage of charges created on leases for the revenue accounts you choose.

      • Select the Base Category for the management fee and enter the Fee percentage. Choose the Expense Category for the fee, such as the default Management Fees expense account.

      • Use the Add Another Fee link to charge a fee on another base revenue account.

    • Percentage of charges posted (Cash Basis)

      • If your fee is based on the actual money you collect from tenants, pick this method. This will calculate the fee as a percentage of payments received for the revenue accounts you choose.

      • Select the Base Category for the management fee and enter the Fee percentage. Choose the Expense Category for the fee, such as the default Management Fees expense account.

      • Use the Add Another Fee link to charge a fee on another base revenue account.

    • Flat Fee

      • If you charge a set, non-percentage fee every month, pick this option.

      • Enter the Fee amount and choose the Expense Category for the fee, such as the default Management Fees expense account.

      • Use the Add Another Fee link to add additional fees if necessary. (You may need to do this if you charge another fee to a different expense account.)

  4. Next, if you have a minimum fee you collect, toggle on the setting for Set a Minimum Fee.

    • This option ensures that your management fee will at least be the amount entered here. (Once the total of your other fees exceeds this amount, DoorLoop uses that total instead.)

    • Enter the Fee amount and choose the Expense Category for the fee, such as the default Management Fees expense account.

  5. In the Set Up Payout Categories section, click + Add Account if there is an account in your chart of accounts for which your management company keeps the total amount, passing nothing on to the owner. This means these accounts will not show up as revenue on the Profit & Loss report or the Owner Statement.

    Use the dropdown menu to select the account and use the Add Account link if you need to add other accounts.

  6. Click Save to finish.
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Tip: Use Payout Accounts if you plan on keeping 100% of the income from accounts such as Late Fees, Applications Fees, Convenience Fees, etc.

If you plan on setting up a different management fee policy for specific properties, for instance, if you charge a property owner a different fee than your default company one, please read the instructions here on how to set up your property-specific management fee policy: Set Up Your Property-Specific Management Fee Policy.

Also, if you have different units on the same property, but these are owned by different owners with different management fee structures, you should create a new property for each unit so you can set up different management fees for them.

Preview your management fee setup

As you set up your management fees, you'll notice a Simulation window on the right-hand column that shows exactly how your calculations work from your management fee settings. You can change the default amounts from which the calculations work by clicking the Edit Inputs button.

Next Step

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