Where do you park your rental income?

[Mathew Fuller]

Hello BP,

I have a few questions:

First

I recently acquired my first tenant in a house a hack. Today I opened up a new checking account with my bank, and I either need to have direct deposit setup with a minimum of $500 deposited each month (which I can't do because this is rental income), or I need to maintain a $1500 balance at all times to avoid a fee. Is there a better way / account that I should be using for receiving rental income so that my $1500 isn't wasting away not working?

Second

What do you do with your rental income to make it work for you? I was thinking about forwarding it onto my online savings which has a 1.5-2% interest rate, or sending it to my individual broker account and investing it in a mix of VTI / other index funds. To me though when I invest in index funds the goal is long term, and I want to access my rental income within the next year or two to get my next property, I don't want to potentially lose money when I need to pull money out for a deal, and also don't want to pay any captial gains taxes, but the online savings may not be the strongest way I can park my money. Ideas?

Thanks

[Steve Vaughan]

I'd invest a few minutes in finding a bank that doesn't have b.s. fees and minimums. BOA, Wells, yuck. Smaller community banks and CUs have free checking.  Chase has free premier accounts for veterans and that's awesome.  Free checks, free cashier's checks, no monthly fees, etc. 

Honestly , a savings account is insurance and not meant to nor will it earn you a lot today. I keep my opportunity fund in a money market earning about 2%.  It's purpose isn't to make money, but to be available to jump on an opportunity while it mostly keeps up with inflation. The opportunity is suppose to make the money, the rainy day fund to keep you dry when it rains 👍