Should I open separate bank accounts for each property?

Question

Just curious as I'm about to start renovating and BRRRR my second property. I'm wondering is it better to just open another checking account to keep it separate from my first home? Than just continue to do that going forward for every house after? OR keep it all flowing through one checking business account. OR You have some even better way!

School me please.

Thank you

Rueben

School me please.

Thank you

Rueben

Dawn P. · Answer

@Rueben Pacheco You'll probably get several different answers, but I personally just use one checking account for all my rentals and one savings account to keep all the security deposits in. The thought of keeping up with a separate account for every house gives me a headache, lol.

Theresa Harris · Answer

If you are worried about reno budget and keeping track, I would.  Otherwise, I'd just do the one account.  When I was doing renos on two of my places, I just used my one bank account.

Mindy Jensen · Answer

Read your state's landlord tenant laws to see if they dictate any special rules for security deposit, ie interest payments, etc.

Then, look at your own self. Would it complicate your life to have everything in one account? Would it EASE your life if everything was separate?

Do what works best for your own style, while also complying with state laws.

Jim Kalish · Answer

@Rueben Pacheco it will get overwhelming after 3 or 4 homes. Use something like QuickBooks to keep track of the individual houses, not your checking account. Just code each transaction to the right property.

Conor Brennan · Answer

To piggyback off of Mindy's comment, for security deposits, it's often easiest to separate them out into their own individual accounts, especially if your state requires interest tracking and payment. This article touches on the benefits and was helpful when I was structuring my accounts.

Bob S. · Answer

@Rueben Pacheco  no, not sure why you would. all one bank,

Good Luck

Michael Ablan · Answer

@Rueben Pacheco - I have a bank account for every loan I have.  This allows us to really easily keep tracks of our books and keep things separate.

I would find a bank that allows you to access all the accounts in one log-in.

Kathy Cooper · Answer

I do STR and separate accounts would be a nightmare for me. You can have one checking account for the LLC and get your Quickbooks set up using Classes for each property. This will allow you to tag each property while using one account. There are good instructional videos out there somewhere... I personally want to limit the number of checking accounts I have to balance each month.

Alecia Loveless · Answer

@Rueben Pacheco I believe it’s a personal decision but I’ve always kept separate accounts for separate properties and separate businesses. I like being able to quickly go into my online banking and access my “3-Plex” and see that I have $18,127.94 as a balance and when the electronic deposits were made and what day the mowing service check cleared and then flipping over to the mortgage account and transferring the payment due 10 days early and seeing it clear the next day.

As opposed to having to wait and figure out if the mortgage check cleared one day before it’s due from a big account with $60,000 in it from all my properties and 5 mortgage payments going out the same day and 30 checks clearing every day which I feel is more complicated than separate accounts.

Aigo Pyles · Answer

Not necessarily. But if your business is structured as a LLC, a separate bank account is necessary.

Should I open separate bank accounts for each property?

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