When should I open a new bank account for my rental properties?

Question

I'm just starting out and I don't think I'll create an LLC to invest in my first few rental properties. Should I still create a new bank account (and get new debit/credit cards) for all the income/expenses for these rental properties? Are there popular banks that are favorable towards REI?

Daniel Hyman · Answer

I think a separate bank account is helpful even without an LLC. It should streamline the bookkeeping immensely.

Having to comb though all of your personal transactions to fish out the real estate ones can be a big time water. Having the transactions segregated in their own account is much more efficient. Same with the CC's

Dan Kim · Answer

This was all very helpful. Thanks all!

Bud Gaffney · Answer

@Dan Kim open the account asap

Todd Lennig · Answer

I would agree with everyone on the number of accounts to open. I like the profit first model budgeting and accounts and would add a tax savings account.

As for banks, if you go with an llc, I would recommend Relay Bank because you can open accounts as you add properties or as need arrises. It is an on-line bank so if that isn't in your comfort zone then probably not the right one for you. A lot of my bookkeeping clients use Chase for their businesses. If you are in the area that has a Huntington Bank they are pretty good and have no fee accounts, or did. For personal accounts they do not have minimum balances, or didn't a year ago. If you go with Huntington, make sure you log in immediately to turn off paper statement or you will get charged for them.

If you have more questions please let me know always happy to help.

Trevor Kollis · Answer

Dan,

I would advise opening two bank accounts. One for Rent Roll/Checking (Day to Day) and also one for Lease Deposits. For Debit/Credit, it is very helpful for reoccurring payments as well as organizing numbers and also another layer of fraud protection with credit cards. I wish I could help you with recommending a bank, However, I have always used as well as had good luck with local banks. Getting Checks for both accounts would also be helpful.

When should I open a new bank account for my rental properties?

When should I open a new bank account for my rental properties?

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