Skip to content
Charleston Real Estate Forum

User Stats

13
Posts
10
Votes
Samuel Young
  • Austin, TX
10
Votes |
13
Posts

Do you have a business checking account?

Samuel Young
  • Austin, TX
Posted Aug 9 2021, 14:27

Hi all! I am just about to buy my first property in the Austin area, and I want to make sure I have everything I need in place before closing. I am looking to set up a checking account so I can keep my finances separate from my investing. My question is do you have a business account or did you just open up a personal account? I will not have an LLC or any other official business entity.

Please let me know if there are other factors I should be considering!

User Stats

738
Posts
419
Votes
Kathy Henley
  • Rental Property Investor
  • St. Louis, MO
419
Votes |
738
Posts
Kathy Henley
  • Rental Property Investor
  • St. Louis, MO
Replied Aug 9 2021, 14:29

@Samuel Young Oh yes. My account has a thing about co-mingling funds.

User Stats

243
Posts
111
Votes
Cody Lewis
  • Investor
  • Charleston, SC
111
Votes |
243
Posts
Cody Lewis
  • Investor
  • Charleston, SC
Replied Aug 9 2021, 17:04

It’s much easier to manage funds and e spends with separate accounts. This will likely be true for you and your accountant.

NREIG  logo
NREIG
|
Sponsored
Customizable insurance coverage with a program that’s easy to use Add, edit, and remove properties from your account any time with no minimum-earned premiums.

User Stats

13
Posts
10
Votes
Samuel Young
  • Austin, TX
10
Votes |
13
Posts
Samuel Young
  • Austin, TX
Replied Aug 10 2021, 12:37

I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?

User Stats

17
Posts
9
Votes
Ku Thao
Pro Member
  • New to Real Estate
  • Minnesota
9
Votes |
17
Posts
Ku Thao
Pro Member
  • New to Real Estate
  • Minnesota
Replied Dec 1 2022, 17:57
Quote from @Samuel Young:

I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?


This is the same question I have. I will not be opening up an LLC at the moment.

User Stats

121
Posts
67
Votes
Kirsten M.
Pro Member
  • Realtor
  • Albuquerque, NM
67
Votes |
121
Posts
Kirsten M.
Pro Member
  • Realtor
  • Albuquerque, NM
Replied Dec 1 2022, 21:28
Quote from @Ku Thao:
Quote from @Samuel Young:

I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?


This is the same question I have. I will not be opening up an LLC at the moment.

When I first started investing I didn't open a business account, however, I kept meticulous records of all business expenses and had documentation to back up everything. My accountant loves me! Ha! Once my portfolio grew and the properties were put in different entities, I opened a business account. My best advice, if you aren't good at keeping your books clean, open a different account just for your real estate investments.

User Stats

185
Posts
156
Votes
Brian Wilson
Pro Member
  • Investor
  • Longmont, CO
156
Votes |
185
Posts
Brian Wilson
Pro Member
  • Investor
  • Longmont, CO
Replied Dec 1 2022, 21:39

@Samuel Young Solid input already here. I would recommended you check out the book "profit first". If you haven't already. It's a great way to begin looking at these kinds of questions from a more strategic nature and how you position said accounts. 

My only account related advice aside from that if you decide not to read the book. Don't co-mingle your funds. Keep it simple for you and your CPA.

User Stats

66
Posts
20
Votes
Himanshu Singh
  • Rental Property Investor
  • California
20
Votes |
66
Posts
Himanshu Singh
  • Rental Property Investor
  • California
Replied Dec 1 2022, 21:53

I have to same question. Verdict is I guess separate accounts. But is it better to have a separate business or personal account?  Separate business account I guess will give you an ability to get a small business loan if needed.

User Stats

17
Posts
9
Votes
Ku Thao
Pro Member
  • New to Real Estate
  • Minnesota
9
Votes |
17
Posts
Ku Thao
Pro Member
  • New to Real Estate
  • Minnesota
Replied Dec 2 2022, 06:44
Quote from @Kirsten M.:
Quote from @Ku Thao:
Quote from @Samuel Young:

I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?


This is the same question I have. I will not be opening up an LLC at the moment.

When I first started investing I didn't open a business account, however, I kept meticulous records of all business expenses and had documentation to back up everything. My accountant loves me! Ha! Once my portfolio grew and the properties were put in different entities, I opened a business account. My best advice, if you aren't good at keeping your books clean, open a different account just for your real estate investments.

 I might be missing some details regarding the "business checking account".  When I go to different institutions that offer this service, it requires an "EIN" tax number or an entity type.  Can I get a "business checking account" without one of the business entities?  

User Stats

10,515
Posts
11,820
Votes
Bruce Woodruff
Pro Member
#4 All Forums Contributor
  • Contractor/Investor/Consultant
  • West Valley Phoenix
11,820
Votes |
10,515
Posts
Bruce Woodruff
Pro Member
#4 All Forums Contributor
  • Contractor/Investor/Consultant
  • West Valley Phoenix
Replied Dec 2 2022, 07:16

It doesn't really matter when you are a Sole Proprietorship. Just open a checking account and have the checks printed with your business name. Open a savings account too and put 20% in it (Or whatever you decide)

User Stats

9,861
Posts
5,503
Votes
Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Investor
  • Austin, TX
5,503
Votes |
9,861
Posts
Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Investor
  • Austin, TX
Replied Dec 2 2022, 23:15

Open a business account, I use Guaranty Bank & Trust in Austin 

User Stats

14,019
Posts
11,289
Votes
Chris Seveney
Pro Member
#2 All Forums Contributor
  • Investor
  • Virginia
11,289
Votes |
14,019
Posts
Chris Seveney
Pro Member
#2 All Forums Contributor
  • Investor
  • Virginia
Replied Dec 3 2022, 04:54

@Samuel Young

If you do not have a LLC you technically do not even need a separate bank account but should use QuickBooks or a spreadsheet to track all your income and expenses for the year for your tax returns

User Stats

458
Posts
446
Votes
Allan C.
  • Rental Property Investor
446
Votes |
458
Posts
Allan C.
  • Rental Property Investor
Replied Dec 3 2022, 09:35

@Samuel Young simple answer: have separate account but just make it a personal account. You have no need for a business account without a LLC, especially since everything else will be in your personal name.

BiggerPockets logo
Meet Investor-Friendly Agents
|
BiggerPockets
Network with top investor-friendly agents who can help you find, analyze, and close your next deal.

User Stats

121
Posts
67
Votes
Kirsten M.
Pro Member
  • Realtor
  • Albuquerque, NM
67
Votes |
121
Posts
Kirsten M.
Pro Member
  • Realtor
  • Albuquerque, NM
Replied Dec 5 2022, 04:04
Quote from @Ku Thao:
Quote from @Kirsten M.:
Quote from @Ku Thao:
Quote from @Samuel Young:

I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?


This is the same question I have. I will not be opening up an LLC at the moment.

When I first started investing I didn't open a business account, however, I kept meticulous records of all business expenses and had documentation to back up everything. My accountant loves me! Ha! Once my portfolio grew and the properties were put in different entities, I opened a business account. My best advice, if you aren't good at keeping your books clean, open a different account just for your real estate investments.

 I might be missing some details regarding the "business checking account".  When I go to different institutions that offer this service, it requires an "EIN" tax number or an entity type.  Can I get a "business checking account" without one of the business entities?  


In order to get a "business checking account", you will need an EIN number. I think a lot of first time investors start with opening a separate checking account and use it as their business checking account. 

User Stats

1,181
Posts
1,152
Votes
Ryan Kelly
  • Real Estate Broker
  • Austin, TX
1,152
Votes |
1,181
Posts
Ryan Kelly
  • Real Estate Broker
  • Austin, TX
Replied Dec 7 2022, 18:50

@Ku Thao you can't open a business checking account without a business (LLC, S-Corp, etc). You don't need a business checking account for a rent home in your own name. Just open two separate bank accounts. One for all operations and a separate one for the security deposits. This way those are not co-mingled.

User Stats

17
Posts
9
Votes
Ku Thao
Pro Member
  • New to Real Estate
  • Minnesota
9
Votes |
17
Posts
Ku Thao
Pro Member
  • New to Real Estate
  • Minnesota
Replied Jan 5 2023, 16:50

Sorry to Hi-jack the thread. I'm thankful for all the responses.  I did open separate accounts. One for income/expenses and one for security deposits that accrue interest.  Thank you all again!