The way I did it was: set up a separate checking account which rent flows into and all expenses flow out of. Start out with balance of $10k for reserves. Let the cash flow pile up for awhile. When you buy the next property, skim off the top (down to $10k) to help pay for inspection, appraisals, closing costs. Repeat.
I do have a spreadsheet (nothing fancy) that I export my transactions to monthly so I can track how each property is doing.
What would be the advantages of having the income in a separate account as oppose to letting it go into my regular everyday account? Is it just easier for tax purposes or is there other advantages to doing that?
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