For investors with multiple doors. How do you set up bank accts?

Question

Do you have everything flow in and out of a single account and let accountant does his thing?

or you set up one new account for each property you own.

or is there an even better method?

I want to keep a more accurate monthly financial statement, but not sure what the best setup is for both me and my accountant.

Nathan Grabau · Answer

I have a bank account for each LLC that I have. I then keep a ledger through quicken associated with each of the different properties I own. What are you expecting your accountant to do? 100% of your books or just taxes? I maybe spend1-2 hours a month keeping track of my books for my 12 doors across 4 properties, I would encourage anyone who wants to keep better control of their finances at the beginning of their investing journey to use the accountant as a consultant on how to do their books, but then track their books on their own.

Jasmine Delves · Answer

Property management software is a good way to manage your finances for separate properties. You can set up online rent collection, link your bank feeds and generate financial reports.

You can also share the reports with your accountant.

Chris Seveney · Answer

@Patrick K.

I have a bank account for every LLC but have multiple assets in a LLC. Each asset is a “class” in QuickBooks so you can easily run a balance sheet, P&I and other financial statements by either the LLC or the asset.

Theresa Harris · Answer

Honestly, I have everything in a single bank account.  I know the rent that goes in and for any expenses, I put the receipts into different folders for each property as they come in (and I pay them right away).  All of my regular bills have the property address on them and for repairs or store receipts, I write the address on the top and file it with the other items for that property.  When I do my taxes, all the receipts for that year for each property gets moved to another spot in my filing cabinet.

Nathan Grabau · Answer

So you should try to use a place that is not just your bank account for keeping track of your bills. This could be a simple as a spreadsheet, but there are software options that are not too expensive for this.

You want to keep a separate set of records from your bank account so you know what you should be getting charged, not what you are getting charged. You then can have multiple doors that go to the same bank account because you are tracking it separately. You also then benefit from knowing how much money you actually have vs what your bank account says. If you write a $800 check and forget about it, a vendor could sit on it for 3 months and then deposit it, and you account goes negative because you had forgot about the check.

You really do not want to rely on your bank to be your "accountant", there is a reason that is a separate role.

Manny Vasquez · Answer

If possible, I would do as @Nathan Grabau suggested above.   If his suggestion is not a possibility for you, then have your tenants send you a picture of the deposit slip after they deposit their rent, each and every time.  This will hopefully help you keep track.

Also, there are some great "rental software programs" out there that you can use to help you collect rents (tenants can pay direct into these programs too) and keep your books in order.

Carlos Ptriawan · Answer

I use the same bank account.For maintaining records I just use Stessa or the reports from Property Management. For property that I don't use PM, I just use Stessa for everything.

Markus Shobe · Answer

Most of my clients have a different bank account for each LLC. I think it is easier to manage that way.

Abhijit Ambadkar · Answer

I have the same question. Till now I had one property per LLC, so it was easy to track.

I am now thinking of keeping the same accounts, but as I acquire more properties in existing LLC, tracking each property in Stessa. It seems to keep track of leases, bills, rents etc. Has anyone used it?

What does Quicken / QuickBooks provide to keep track of each door?

Patrick K. · Answer

He charges me hourly for bookkeeping. So the easier I make it for him, the cheaper. My problem with 1 account for multiple doors is that when the utilities bill come in, electricity/gas/garbage/water/tax/insurance * the number of property you have, is just too much. Please you can't really tell from the bank account which bill belongs to which door, and you have to cross-reference to statements, which may or may not get lost in the mail. I'm thinking just 1 account each door. so when the gas bill comes in for property 1, I can catogorize it from the bank statement alone without refering to the bills.

For investors with multiple doors. How do you set up bank accts?

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