Intro to coManage

How coManage is structured and how to setup or adjust your account.

Dan avatar
Written by Dan
Updated over a week ago

Right now, there are at least three ways to use coManage:

  1. As a self-owned manager (first-party): You own your properties and the receiving bank account is the final destination of net rent payments.

  2. As a non- or partially-owned manager (third-party): You own a percentage or none of the properties you manage and will be sending at least some net rent payments to third party owners/investors.

  3. A blend of both 1 and 2.

This is one of the basic structures of coManage:

Starting on the right: One or more Occupants (Tenants or Homeowners) belong to Occupancies. One or more Occupancies can belong to a Unit/Property. You may have more than one Occupancy on a Unit if there is a move out and move in occurring simultaneously. Occupancies can be Open or Closed. If there are no Open Occupancies on a Unit/Property, it is Vacant.

Non-manager aside: Imagine you are using coManage for a sales brokerage - to track property details, work orders, pay vendors and agents, etc. - and acting as a dual agent. You might setup the buyer and seller both as Open Occupancies.

Units belong to Properties. If it is a single-unit Property, the Unit will be effectively invisible. If it is a multi-unit Property, you will see the individual units as well as the main Property. This is so that you can record common expenses to the main property (think landscaping, roofing, etc.) but assign other expenses to individual units if you so desire (e.g. turn costs).

Properties can (but don't have to) belong to Portfolios. Portfolios define ownership. On a Portfolio, you can set ownership percentages and pay out percentages. They can differ (e.g. 90% owner but 100% payout) and you can have a 0% owner. For example, you can make a client's accountant a 0% owner. Ownership % primarily affects year end 1099s, if needed.

Now, let's get into how cash moves.

Self-Owned Manager (First-Party)

As a self-owned manager, your setup is simpler. You add the destination bank accounts as Escrow Accounts (Settings > Financial Accounts), set up your Cash Management Rules (Settings > Cash Management Rules), add your properties, units and occupants and you're ready to go. You do not need to use Portfolios (but you can if you want).

The structure is like this typically:

But it could be like this:

Or like this:

There's really no limit on how you can configure your cash flows. We've seen six bank accounts for one property to one bank account for many properties. That said, we recommend keeping it as simple as possible to reduce errors and confusion.

Non- or Partially-Owned Manager (Third-Party)

Third-party management makes use of the Portfolio to both produce reports for accounting and taxation but also to determine how cash flows.

A third-party flow looks more like this (we've cut off the Occupancy stuff since we explained it already but you can imagine it to the right):

In this example, Portfolio 1 owns Property 1, Property 2 and Property 3. Rents flow into Bank Account A, which is under your control, then, eventually, gets paid out to Portfolio 1 according to its rules. In this case, 25% of net rents get paid out to Bank Account 1, 25% to Bank Account 2 and 50% to Bank Account 3. You can manually change this any time.

Furthermore in this example, Portfolio 2 owns Property 4. 100% of net rents get paid out to Bank Account 3.

As in first-party management, you can use anywhere from one bank account to hundreds. It's all up to you and we can help you get it configured right.

Mix of First- and Third-party Management

You don't need to box yourself in. You can have some properties with portfolios and others without. We've built coManage to be flexible. While that flexibility is powerful, always try to keep things simple.

In some cases, it may make sense for us to disable Portfolios entirely on your account if you don't need them. This will help to de-clutter the interface and to prevent any accidental use.

What You Need to Ask Yourself

Do I self-manage? Do I own my properties 100% or do I have partners? Is it for every property or just some?

What's the final destination of rent payments? Is it the account in which rents were received or do I send net proceeds somewhere else?

Do I pay myself or another entity management fees?

Do I need to reconcile my bank accounts? Reconciling is easiest when your property management activity isn't mixed with other activity. Otherwise, you'll have to enter that activity into coManage to make your books pencil out. It's far more cost and time-effective to have a separate bank account.

If you have any questions, shoot us an email:

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