Accepting a year's Rent from Tenant

[Mike Stahlman]

Hello we are in Missouri.  We have 12 Rental houses.  This is a new one on us so need a little advice.  Tenants paid first years rent up front.

We have vetted and accepted a tenant that is good.  Great credit score, no evictions, no criminal records, etc.  They are from Florida and he is a truck driver with a good work history and provided past six months pay stubs.  He had two letters from prospective employers in the area and was deciding which to accept.  They were living in a hotel at the time trying to get a house to rent.  This was another reason he wanted to pre pay.  He said they had the money from the sale of their house but he currently was not working and wanted to not worry about the rent for a year.  Since they moved in he has attained a job.   

We accepted the full amount October 1st.  Is there a way we can put the money in a separate account, trust, etc. so we are not accepting the full amount in our account as income for this year.  If so, what are the good and bad implications of this?  I am not worried about the tenants and will keep an eye on the property and them.  Again, we did our due diligence on them before we accepted them.  Now we are trying to make sure we can separate the funds so we do not use them in case something falls through and they move out early for any reason.  Also wanting to minimizing taxes this year etc.

I did try to talk them in to keeping the money in a savings and earn interest on it or something but he said because he did not currently have a job, and knew they would not be accepted without a job unless they paid a good amount up front and that is what they had decided.  

Thank you.
 

[Greg H.]

Quote from @Bruce Woodruff:

This question is asked a lot, do a search for more answers. Generally this approach is highly discouraged as it has zero advantages for you, the landlord.

You need to keep it in a separate account and draw out the rent amount only each time it is due, meaning you can't take the money and go buy a boat or something.

I never understand this logic except if state law/local law prohibits.  Of course there is a benefit as a landlord does not have to wait/wonder if the rent will arrive each month.  I do get the difficult to evict argument however in my opinion that is derived from those where it is difficult/costly to evict anyway.  
On a side note, in Texas we can do anything and everything we wish to with a deposit or prepaid rent be it buy a boat or head to the casinos in Louisiana.  Of course I don't recommend that :)