Funding expenses early in a rental property purchase

Funding expenses early in a rental property purchase

Member since 2022 · 4 posts · 0 votes

I realize from a business perspective you should completely separate real estate finances from personal finances with separate bank accounts.
However, especially in the beginning, is it reasonable just to transfer in money from my personal to rental business bank account in order to fund expenditures (taxes, maintenance/repairs, insurance, appliances, etc?). Assuming I keep track of the expenses for tax purposes etc. 

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  • Real Estate Agent · Keller, TX · Member since 2016 · 32 posts · 7 votes
    4y

    Yes, you will need to usually invest a few thousand dollars in order to get your property up and going.  It is called owner equity on my accounting software.  Not sure if you just got the one property, but it would be good to start to use some accounting software to keep track of all your expenses and dollars invested.  It helps a ton come tax time. Good luck.

  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y
    Quote from @Benjamin Fogle:

    I realize from a business perspective you should completely separate real estate finances from personal finances with separate bank accounts.
    However, especially in the beginning, is it reasonable just to transfer in money from my personal to rental business bank account in order to fund expenditures (taxes, maintenance/repairs, insurance, appliances, etc?). Assuming I keep track of the expenses for tax purposes etc. 


    Yes, you can fund the starting point with personal funds, just like you funded the purchase with personal funds. Once it's up and running, then you should try to keep it separate. If the roof caved in two years after purchase and you still have to use personal funds, there's nothing illegal or wrong with that.

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