So...how many bank accounts do you have?

Question

We are getting ready to buy property number two, and possibly number three in the next couple of months.  My wife feels like we should have a bank account for every single property we own.  I guess that is fine with 2 properties, but down the road, i feel like having 10 accounts for 10 properties will get confusing.  Just looking for some advise, not the account balances. HA.  Thanks all!

Gloria Mirza · Answer

I have one for long term savings, one for investing in stocks, and one for rental income.  A good option is to use online rent collection software.  I have recently asked my tenants to start using cozy.co.  It's free and would help track rental income on a per door basis.

Larry Mastropieri · Answer

I have read through many of the forums but I have not found a clear answer on the following question.

I have 4 multi-family properties that I own with a partner.  We have one Master LLC that we both are 50/50 owners of.  This master LLC owns 4 LLCs, one for each property.  I use quick-books for my accounting.

My question is as follows.  How should I structure my accounts?  Should I create 1 account for each property under the respective LLC property name or should I create only 1 account under the master LLC name?

Gloria Mirza · Answer

All of my tenants have computers and I don't expect any problems.  I have 9 rentals and just started using it with one of my tenants.  We'll see how it goes :-).  Main drawback is that it will take you a few more days to get your money because the ACH transfer takes time.

DJ Cummins · Answer

@Gloria Mirza you dont have any problems with the online payments?  Is is hard for the tenant to use?  I have 2 that are older and i dont think this would work for them.

DJ Cummins · Answer

thank you all for your responses, it helps me ease the wife's mind.  Have a great weekend everyone!!

JD Martin · Answer

Lots of accounts but only two that I use for the business: an escrow account to hold deposits and an account that holds income and pays expenses.

Jeff B. · Answer

Take any account and allocate portions for x,y,z.  You better keep good records of the allocations and as @Alexander Felice shows, use each account for a specific purpose.  The problem comes in (1) the operating account.  Many transactions later, the x,y,z gets totally obscured by the current balance.

I chicken out and create new accounts for:

• property taxes (only two actions per property per year)
• IRS Estimated taxes
• family personal account
• property operational account (all collections and bill payments)
• tenant deposits (in a Credit Union)

Alexander Felice · Answer

1 operating account

1 escrow account

1 rental income account

There is literally no benefit to having an account for each property when you're probably only doing 2 transaction most months (rent in, mortgage out).

Elliot Lamson · Answer

i keep a sub account for each property. I use BofA they don't charge you if you keep a certain balance at all times.

Jake Thomas · Answer

2 accounts, personal and business. No need for separate accounts if you keep accurate records with software or spreadsheets. Quick books is an option. The more accounts you own the more you need to share with your lender when getting loans. Having all transactions in one account is easier to manage.

So...how many bank accounts do you have?

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