Just curious as to how other folks are managing the rental income once its deposited into your bank account. For instance, are you transferring the "real cash flow" to a your everyday checking account and leaving all the reserves in another account? Are you using a high yield account for the reserves? Or just leaving the entire rental income in one account and saving the real cash flow for another investment? Appreciate it and have a good one!
Hi @Gabriel Novotny , everyone's process is going to be different but I like to keep things simple. I have everyone's security deposit comingled in a separate (security deposit only) account and each property with their own checking account. I don't skim off any cashflow for myself but I guess it would be easy enough to do an automatic transfer into your personal checking every month. I keep all the funds in that one account and pay bills from that. If there are repairs and cap-ex, that all comes from that same account.
You don't need to spend money on a business account, just open another personal accout with your current bank. Hope that helps.
Hi Brad, this is Troy. Does that mean that you have an LLC for each property and you open up a business checking account for each of your properties?
Hey @Troy T. Felder Sr. I don't use LLC's at this point in my investing career. LLC's are great for asset protection from lawsuits but there are other ways to protect yourself as well. I have good insurance, an umbrella policy and I don't keep much equity in my properties for lawyers to get after.
Beyond that, I use personal accounts so I don't have to pay the bank fees associated with business accounts.
Thank you and forgive my newness but when you say personal accounts, whose name is the account in? Is it to properties name or is it your name?
For my accounts, they are under my personal name at the bank and I can create a nickname for them which I have as the street name.