When calculating cash flow, we use 6-8% vacancy, 6-10% maintenance and 10% caps. The question I have is, if there are more than one house rented, how an invester will manage each of the accounts. If we need to look at separating out how much funds are available for each of the home, how to keep track of it. Do we need to keep separate bank accounts for each home or is there any other way of planning for keeping track of funds.
I am sure you will get a ton of answers on this. I am relatively new and I am using separate bank accounts for all my transactions. I currently own one SFH and am getting ready to rent out my current home. Another system you may want to look into would be rentmanager.com. I have not begun to use it but it looks like it would be an awesome management system.
What would be the benefit of using separate accounts for each property? I use one for my LLC and keep my personal seperate. Having a good rent roll and spreadsheet should be sufficient.
I used to manage expenses for two properties in two separate bank accounts. Looking back, it was a nightmare. I don't know rentmanager, but in Quickbooks, setting up each property as a "class" keeps the accounting balances clean, even if all of the cash is stored in just one bank account.
I agree with Dan. I am a bookkeeper who has many years experience of working with clients with properties. Quickbooks Pro is the best program so you can use classes for each property. Start with one LLC if they are all in one state to protect yourself. One bank account is best just make sure that you put a class for each transaction you pay for and make invoices each month for the rent income designating a class. Then you can run P&L's by class and know that everything is accounted for. Run the P&L by class by customizing report on the left/pick filters/class/then the one you want in the drop down.
You can reach me if you want more details.
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