Bank Accounts - How do you organize them?

Question

How do you all organize your rental property bank accounts?

Bank Account per property? Pros: Would be very easy to see expenses/costs etc. Cons: Would end up with lots of Bank Accounts but still organize them all under "Business"

Single Bank Account? All deposits and costs would go into a singular account. Could still see totals for the whole business but would need something separate (maybe excel sheet) to see how each property was doing.

Quickbooks?

Trying to come up with an efficient way to organize my properties. It's been turning into quite the cluster the past couple years. Trying to make this easier for my CPA down the road.

Terrell Garren · Answer

26 SFHs, 1 LLC, 1 checking account, 1 insurance policy, apartments.com, 1 old pickup truck, 1 laptop, 1 cell phone w/ 25 trusted professionals & contractors on speed dial. I'm guessing self-management takes maybe 15 hours per month.

George Davis · Answer

Hello friend I hope and have organized your account already

Markus Shobe · Answer

You would need at least one bank account per LLC. You can do a bank account per property and it can be easy if you don't own to many properties, but if say you have 20 it would be to much to have 20 different bank account. You would have to reconcile the 20 bank accounts each month and I just think that would be to much work. Even by hiring a professional to handle the books they will charge you more for having a lot of bank accounts.

Todd Rasmussen · Answer

@Jeremy H.

One bank account. Stessa to track income/expenses and excel to track depreciation. When we break into multiple LLCs, we'll do bank account per LLC.

Adam Martin · Answer

I have 3 accounts.  The most important in my state is my savings account, this is where I keep my deposits and nothing else.  If I comingle personal funds and deposits I loose the right to deduct and the tenant also has to be provided the bank and account number.  No big deal but would be a bummer to miss if I ever ended up in court.  The second is my checking which is where rents go and mortgages are auto deducted, I keep at least 2 months of rent in here per property.  The 3rd is a brokerage account where I keep excess cash and invest hoping to grow and buy more.  Don't overcomplicate this, I can't imagine having an account per property.

Brock Boudreaux · Answer

I try to keep things as simple as possible, while also attempting to be somewhat organized. All of my income (job and side hustle included) goes into one checking account. Then I set up auto transfers once every 2 weeks on Friday into my other account (same bank for insta transfer) for what I basically want to pay myself. That’s my personal daily use checking account. Everything left over in that other account either is auto transferred once per week (predetermined amount for automation) into my Emergency Savings (same bank again for reason mentioned), auto transferred to my Ally online savings (only for their bucket system which i use for sinking funds), and the remaining amount that doesn’t get transferred is my next real estate investment plus the CapEx/Vacancy.

Example (fake numbers): I get $8000 income over the course of a month, all of which deposits into check acc 1. I know that I spend $3600 on expenses every month so I have auto transfers set up every other Friday to send $1800 to checking acc 2, which is where all of my daily transactions come from. I also auto transfer every Friday $30 to my Emergency Savings acc, and $150 to online savings (sinking funds). I’m not gonna do the math but let’s say at the end of the month, I have $2500 left over that didn’t get transferred from checking account 1. That amount will be saved every month (assuming my income doesn’t fluctuate too much, which unless you are in sales, a real estate agent, etc, shouldn’t matter too much)

Sorry I know this is kinda long and kinda went a little more into personal finances, but that’s what I do. Everything is automated for the most part and I can always adjust how much I want to pay myselfEdit - I didn’t mention it, but I just track income vs expenses on google sheets that I also use for taxes. I don’t have a lot of transactions going on so it takes me maybe an hour per month to update

David M. · Answer

@Jeremy H.

Just work with one bank account.  Use Excel, Stessa, Quickbooks, old fashioned ledger, whatever to do your bookkeeping.  You could use "accounts" as bookkeeping, that that would become ridiculously cumbersome after a few accounts.

Honestly, an account per property would almost be harder to see your financial situation as its spreadout across so many statements.  Lets face it, other items won't be there such as depreciation, passive allowed losses (technically part of your tax return).  If you manage your own bookkeeping, you can see/track all those numbers and also run your own metrics.  Furthermore, I'm not even sure how people actually get all those transactions into a bank statement.  I don't run around paying online or in a store with a bank check..  I use a credit card --- mainly just one...  If you have to keep moving money around between bank accounts, these an even greater nightmare and then you really don't what is expense as its just a transfer...

Bank Accounts - How do you organize them?

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