What is needed on the accounting side before first rental?

[Nader Hachem]

I’m finally in the position to actually take action and purchase my first rental property after I close on my primary later this week. I’ve got the process down of running my numbers, finding an agent and finding a deal that Would work. 

With that being said, I haven’t looked into much of the accounting side. I’ll be speaking to a professional accountant to get their thoughts of course, but what actions are needed for that first rental on the business side?

Are there certain tax implications I should be paying attention to? Is opening an LLC preferred? (What I've been hearing Is no because financing will be difficult - rather get an umbrella policy)

Aside from accounting and tax things, what systems do you have in place that would be greatly beneficial. For some context I’ll be investing in LTR SFHs to begin with

Thoughts?

[Christina Yoon]

Agree that you should have a separate bank account setup for the rental.  Makes accounting easier!  

Also, this helps show compliance with security deposit handling (depending on your state rules).  

I wanted to add that you need to consider how you want the rent paid (app/service). With my SFH rentals, I ask for electronic payments that post (date-stamped so no questions asked if late) directly into the account.

Hope this helps!

Christina Yoon, CPA