Banking question for newbie

[Aaron Rushton]

Hello everyone,

I'm in the process of acquiring my first investment property and am currently setting up a property manager. While I haven't established an LLC for this house yet, I plan to do so in the future. To keep my finances organized and separate for banking purposes, would it be advisable to open another bank account or create a separate entity altogether? How would everyone set up for this?

Thank you for your insights!

[E.J. McCaffrey]

Aaron

It is strongly recommended to set up a separate bank account for your rental property. Ideally, you should transfer the property into an LLC before renting it out and have the LLC own the bank account. However, if that's not an option, at the very least, maintain a dedicated bank account for the rental. Using your personal account for rental income and expenses could expose you to legal risks. If a lawsuit arises, the plaintiff's attorney will argue that you commingled personal and business funds, potentially putting both your personal and investment assets at risk.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.