How do I get started with Harmony when I exclusively manage my own units?
Quick start path C is best for landlords who exclusively manage their own units. This certainly doesn't cover everything, but gives you an overview. Let's get into it!
What's a Management Mode?
Harmony always separates who is doing the management from who the management is done for. When you exclusively manage your own units, all of the management is done for a single entity – you. For this, there is a setting called Self-Management Mode, where everything is in a single managed portfolio on a single management agreement. If you don't manage any properties for someone else, start by setting this.
- Go to Settings and select My Account > Preferences
- For Type of Management, switch from Others to Self
1. Add a Unit
Select Places, then select the Add icon for the type of unit you want to add.
If the Basic or All Fields Form Definitions aren't what you want, set up your own form definitions in Settings > Places.
2. Add Yourself as the Owner
a) Owner Profile
Select Management, then select the Add icon for Owners. Once the owner has been entered, you'll be prompted to add your management agreement.
b) Management Agreement
Your self-managed management agreement still contains all the parameters of a professional management agreement. Users like this because they can easily track the expenses of management, and understand what it might cost if they eventually migrate to an outside management company. If you don't care to track this, you can enter zeros for all the management costs.
3. Add an Occupant
a) Tenant or Guest Profile
Select Management, then select the Add icon for Tenants or Guests. Once the occupant has been entered, you'll be prompted to add their lease or reservation agreement. The type/class of the occupant will determine their default occupancy agreement type.
b) Occupant Agreement
Enter the parameters for this occupant agreement (lease or reservation). Once you've entered the agreement parameters, you can create the agreement form and send to the occupant for their e-signature.
I Want it that Way!
There are a ton of options when it comes to how you handle and process money in Harmony. Before you start processing transactions, take a moment to visit Settings > Money > Preferences to familiarize yourself with the options. Each one has a help tip explaining what it does.
4. Set Up Bank Accounts
Before you can write a check, process an ACH, or make a deposit, your bank accounts must be set up. Do this from Settings > Money > Chart of Accounts.
You can have a million bank accounts, but everyone starts with three. Click or tap the bank icon beside an account for a brief explanation of the three accounts. If you're not tracking your management costs, you can use a single account for everything, if your laws permit. Select the one labeled Trust as your single account; you can call it whatever you wish but this is where rents go by default.
5. Collect Money
Occupants start by paying their deposits and initial charges. Whenever you get money, select the person it's from, choose Money, then choose Receive a Payment. Deposit the money into the bank from Management > Money > Bank Deposits.
Most managers automate rent collection by setting up a merchant account and accepting payments online. This is all built in to Harmony and easy to set up. People can pay you through their portal, and can set up preapproved or preauthorized payments.
Who is the Owner and Who is the Management Company?
In self-management, they're both you, but most users like to keep them separate. In some cases, you have outside investors who are paid distributions, and you must keep them separate. In either case, Harmony gives you two entities: one represents the person or company performing the management services, the other represents the person or company receiving the rent and fee income beyond the cost of management services. Many property owners create separate LLCs and bank accounts for each, but that's not required to use Harmony.
6. Pay Yourself Your Management Income
If you're tracking management expenses, depending on how you set up your agreements, you may earn money from a percentage of what you collect, fees billed for services, or a combination of both. When it's time to collect, choose Management > Money > Management Bills.
If you're not tracking management expenses, you won't ever have management bills.
Fix It Up!
Maintenance in Harmony is wildly powerful, covering everything from routine maintenance (like filter changes or fire suppression inspections), warranty service, competitive quotes, property inspections, permits, key management, occupant work requests, after-hours routing, job logs, work acceptance, appointment confirmations, and vendor work orders. It's worth taking a moment to explore this, and at a minimum understand how work orders can connect directly to owner withholds and vendor invoices
7. Pay Your Vendors and Sources
Vendors are people or companies who do work on your units. Sources are people or companies who bring you business. Add them the same way you added your owners. Vendors and sources are paid on invoices. Add an invoice by selecting the person who is responsible for paying the bill (an owner or the management company).
Your sources may not invoice you, but expect you to pay them based on a commission agreement. Harmony has all the tools to configure and report on source commissions. Vendors can see their work orders, invoices, and payments in their portal if enabled.
8. Pay Yourself the Rest
The rest of your collected money goes to you as the owner. You can simply pay yourself from Send a Payment, or Select Management > Money > Owner Distributions for a fail-safe method to make sure you don't accidentally pay yourself anything that's supposed to be held back, or vendors are waiting for.
If you're tracking management expenses and simulating your costs of outside management, you'll set an owner reserve in your management agreement. Outside management companies typically hold back some of your money for unforeseen/emergency expenses. Processing through Owner Distributions also ensures your reserves are maintained, i.e. this is the actual amount you'd receive if you had an outside management company.