Bank Account Options for REI

7 Replies

My wife and I are working on acquiring our first rental property (Short Term Vacation Rental), and I was wondering what you recommend as far as setting up an Operating Account. I've read posts about about having an account for every property vs. a single checking account for everything. Personally I prefer the single account and just using QB for tracking revenue/expenses. But what are your thoughts on using an interest bearing Money Market Account versus a simple checking account, or are there other account types that have more benefits for a Real Estate Investor? We are not creating an LLC at this time, so this will be a personal account at least starting out until we grow a bit bigger (hopefully)... Any thoughts out there? Thanks in advance!!

Originally posted by @Jerry W. :

@Matthew Hammond, bud you have not even bought one house and are worrying about multiple accounts.  Open one checking account and buy a house.  Worry about the rest when you actually think about buying the second house.

My question wasn't about opening multiple accounts. My question was what type of bank account do people recommend...Simple checking or interest bearing money market account or some other account that is beneficial for REI. I appreciate the response, but you completely missed the point of my post...

Banks are paying so little right now that there is little need for an interest bearing account probably.  Keep in mind that Money Market accounts have withdrawal restrictions of only 6 withdrawals per month, so don’t function well as a primary Checking account, but would work well for a holding account for escrows possibly. 

Randy 

@Matthew Hammond , you are correct. I just use a plain checking account. I find I rarely keep enough in it to make a big difference. I do like the accounts some banks have where if you keep a certain minimum the account has no fees, another thing is I do use a money market savings account for my deposit money. That money is not required to be kept separate in my state but I choose to do it anyway. I only use one checking account per company. Now I have set up a few savings accounts where I am doing a special deal. I have sold or helped finance a property to my handyman os probably more confud a friend. They make an automatic transfer into the account, and the payments on the house get deducted automatically from the account. Rather than pay for an escrow account, I use the saving account as a form of mortgage servicer compliance for Dodd/Frank Act purposes. Sorry, this probably more confusing than helpful.