Business Bank Account

[Victor Triana]

I own only one rental property which was used with a VA Loan

But got married and had to move out of state and I’m now renting that home.

I've read a bunch of Real Estate books saying how important it is to have a business bank account... with that being said I've also read that there is no need to open up an LLC right away since I still don't have the momentum or buying power to purchase properties really fast.

I do want to have a good foundation right now instead of fixing all the problems later, so can I open up a business account as a sole propiertor? Or since I only have 1 rental property I’m I good to just have the funds on a separate savings account

And keep all the expenses accounted for?

I’m planning on buying one rental property a year (House Hacking)

Thank you in advance!

[David M.]

@Victor Triana

Honestly, why not just ask your bank??

That's fine that you've decided you don't really need a LLC. If you want a bank account to dedicate for your rental purposes, go ahead and call to open one up. I personally don't think it'd be fraud (but that's just my opinion) to have a another personal account for this. After all, the irs anyway doesn't considered rentals a trade or business—it's a passive investment action.

Itsgreat you are going to have some accounting discipline. Go ahead and open and account. Talk with your banker. Even if you get a business account, many don’t have monthly fees if you carry a low balance (eg $500). That shouldn’t hurt you. Plus, for a rental you’ll have so few transactions (hmmm.. the one rent check a month and the occasional repair bills) it won’t matter.

Good luck.