Rental Account Set Up, How do you do it (Efficiently)?
Hello BP.
I would like to know how do you set up your bank account for rental, specifically for efficiency.
Here is how mine is set up, and any feed back or tip is welcome:
Three accounts
1. Trust account for security deposit - as name says it all, this account is exclusively for tenant security deposit only and independent from other accounts. The money flow in this account should be minimum.
2. An account for acquisition fee and rental collection - this account contains down payment for properties and monthly rental collection from tenants. # of transactions on this account should be highest among three accounts. In future, I may consider separate this account into two: acquisition account and rental collection account.
3. An account for operation and maintenance - this account contains day-to-day operation and maintenance cost such as repair, insurance, property tax, income tax if any, and CapEx. Certain % of account (2) will be allocated to here monthly. Adequate amount of # transaction is expected.
This is all just theory. Now my question is to you is following:
How do you efficiently allocate O&M and CapEx cost? Do you manually allocate certain % every month? Is there software that helps allocation process?