The Importance of Choosing a Property Manager with a Client Trust Account
If you own a rental property, whether it’s a traditional long-term rental or a short-term vacation rental, hiring a professional property manager can be a game-changer. However, not all property managers operate with the same level of financial responsibility and oversight. One of the most critical factors to consider when selecting a property manager is whether they use a client trust account—a legally required account that ensures your rental income and security deposits are handled securely and ethically.
What is a Client Trust Account and Why Does it Matter?
A client trust account is a separate, regulated bank account where property managers must hold owner funds and tenant deposits. Unlike a regular business account, a trust account is subject to strict rules, oversight, and regular audits by the Oregon Real Estate Agency (OREA). This means that your money is not commingled with the property manager’s operating funds, reducing the risk of mismanagement, fraud, or outright theft.
Licensed Property Managers vs. Unlicensed “Cohosts”
In the traditional rental space, most professional property managers are licensed and required to use trust accounts. However, in the short-term rental market (Airbnb, VRBO, etc.), many so-called “property managers” bypass licensure by calling themselves cohosts, consultants, or service providers—avoiding the oversight, financial safeguards, and legal obligations that come with a real estate license.
This means these unregulated managers are not required to keep your funds in a separate trust account, nor are they subject to audits. Instead, they often collect and control owner revenue without any of the legal protections that exist for licensed professionals. This is a massive risk for property owners who entrust their assets and income to someone operating without accountability.
The Risks of Working with an Unlicensed Vacation Rental Manager
Most of the time, things might run smoothly—until they don’t. In Southern Oregon, we saw firsthand how devastating this lack of oversight can be. Just a couple of years ago, a vacation rental manager disappeared with nearly seven figures of client money. Because they were not a licensed property manager, they faced zero consequences—leaving property owners to absorb the financial loss.
A licensed property manager using a client trust account simply cannot run off with your money. The state closely monitors these accounts, and any discrepancies can trigger immediate investigation and legal action.
How to Protect Yourself and Your Investment
As a property owner, you should always ask your property manager these key questions:
- Are you a licensed property manager in the state of Oregon? If not, they are not subject to OREA regulations.
- Do you use a client trust account? If they don’t, your funds may not be protected.
- How are my rental funds and security deposits handled? A professional property manager should be able to clearly outline their process.
Why Work with a Fully Licensed Property Management Company?
At McCracken Property Management, we take these financial safeguards seriously. We operate fully within the legal framework required for professional property management, including maintaining a client trust account and undergoing regular audits. Our priority is protecting your investment, ensuring full transparency, and providing peace of mind that your rental income is handled responsibly.
Don’t risk your property or your money with an unlicensed operator. If you’re looking for professional, ethical, and transparent property management in Southern Oregon, reach out to us today.
If you’re an investor looking for a safe and reliable property manager for your short-term or long-term rental, let’s talk. Contact McCracken Property Management to ensure your property—and your income—are in good hands.