Hi guys, so I’m fully renting out my first multi family property and now I’m living in my second multi family property (house hacking). I have separate checking and saving from my personal life which comes from 9-5 day job. And now I have 3 separate accounts for my rentals. Checking for paying mortgage, Saving for money I actually make, Saving for security deposit. I have a credit card from capital one that I will be using to pay for repairs or other expenses, that’s will be kind of like my business card. I know I won’t be making much money since I’m house hacking for now. But can I pay the capital one from my personal checking account at the end of the month??? I’m technically using my credit card as my buisness card for the rentals but I’m actually paying it through my personal checking at the end of the month. Is it ok??? Or do I have to keep depositing money from my personal checking to my rental checking account to pay it??? Either way I still have to use my personal checking account since I won’t be making much money this year. I truly appreciate your time reading this. Thank You!!!!

@Danny Sok

Danny, when I started out, I commingled my money. Just like you, my money was the rental money...my credit card was the rental credit card.  Also like you, I did keep the Security Deposit separate from all other funds.  So long as you are able to account for what is a rental expense and what is a personal expense you will be okay. In the end, it all goes on your tax return anyway. It will get more difficult as you grow, and generally it is a good practice to keep you personal money and rental money separate.  

Today, I have a credit card that I use for all rental property expenses.  I expense against each property separately to keep accounting clean. I also have a single account for rental income that pays all mortgages, utilities, fees, etc. What is left over I keep.  With that, I do have a reserve built up for each rental property, which took some time to build. But now, I get to keep the profits and manage the process.  

Depending on your state, there may be certain requirements on where you can place certain funds (like security deposits).  In the end, how you manage your business is up to you. There are several way you can cut it, and everyone will have an opinion, but do what works for you and change when you need to.  

I hope this helps!

Nick

Thanks Nicholas.... You sort of answer it for me but as of now ... my first property will break even with my tenants since I have my in-laws paying for everything. So first property has no positive cash flow. Just break even. Second property which I will be living with a tenant so technically I’m paying half the mortgage and the tenant pays the other. So second property has no positive cash flow. I have already have a personal account(9-5 job)and business account(rental properties)setups already. Since my buisness account is negative in cash flow and if I have to pay mortgage and repair. I technically have to pay out of my pocket since I’m negative in cash flow right now. what’s the actual proper way of paying for my business account if I’m negative in cash flow in that account???? Truly appreciate your responds!!!! Thanks again

Start a legit business and start an account specifically for that business . If you want to be taken seriously and keep the IRS at bay don’t co mingle 

separate your personal and business accounts completely. As you said, use your business card for repairs, etc. at the end of the month when you need to pay the credit card, pay it from your business account, and if your balance doesn’t support it, transfer the money from personal to business first.

This gets and keeps you in the mindset of separation and gives you easy financials at the end of the year since you know everything in the business bank account and business credit card was for your business. You can also see how much you’re investing if your own money too.

Heck, if you really want to feel good about your investment, pay yourself rent every month. It’s not going to help with taxes or anything, but you’ll see your business account balance tick upwards!

Wow!! Thanks Mike!!! You guys really are helpful... bless you guys. This definetly will get me more organize. Thank you again