My husband and I just purchased our first rental property (!!!) and are planning on doing some renovation work in the next few months.
We currently have the funds in our own separate personal bank accounts. Should we open a new joint account, transfer our cash in it and use it to pay for the renos expenses, and later on to collect rent and pay the mortgage?
In the future we are planning on opening an LLC and transfer the property to it, does that come with its own business account??
In general we want to make sure we are tracking our expenses correctly for tax purposes, and I really want to separate personal and property-related/business expenses.
Congratulations in your property and I wish you the best in the future with it.
To answer your question which you actually already did yourself is YES,YES,YES.
Separate your personal life from potentially a personal business. It is going to make it easier for you to track expenses, file taxes and monitor what goes in and goes out and for what.
In the book of How to Manage Rental properties by the infamous Brandon Turner, he talks about how to become a successful landlord by operating your rental business as an actual business and not hobby, therefore separate that business from your personal life.
I would recommend a separate account for the property - particularly an account for the LLC. Using a biz account will give your greater protections and in some cases returns. A separate account also allows you to track biz vs personal expenses easier and have cleaner records.