LLC's and Bank Accounts for Property Management Company

[Tom J.]

Hi All,

Currently I am a Property Management Company with 20 units that I manage. At years end I will be forming an LLC and creating new contracts with the owners under the newly formed LLC.

My plan is to just have 1 LLC entity manage all the properties, with an operations bank account, and savings bank accounts for each security deposit we take in. I was curious to know if this is the right way to do it, or if I should have multiple LLC's and/or bank accounts?

Again, I do not own any of the properties, I am solely the management company that provides a service to the owners of the property.

Thanks for the help.

[Drew Sygit]

You only need one LLC, but should have Operating & Management checking accounts and the appropriate account to hold security deposits.

Rents and owner contributions will go into the Operating account.

You will pay property expenses and owner draws from the Operating account.

You will pay your earned management fees to the Management account.

You will pay your company expenses from the Management account.