Buisneess savings account or personal savings account?

[Nolan Mahoney]

Hello, 

Im starting my first house hack here soon and im debating weather i should sign up for a buisness savings acccount or start a separate personal savings account for my tenants to pay rent to. (im using Avail for property management and as a program to collect rent) I went to the bank today and they said i must use a buisness account for tax purposes and i would need to start a sole proprietorship or an LLC to set up the buisness account, even though the building is going to be owner occupied by me. Is this true what the bank is saying or could i just go to another bank and ask to start a new personal savings account.

Anything helps, thanks!

[Josh St Laurent]

@Nolan Mahoney Financial advisor and certified financial planner here, wanted to throw in my 2 cents. The mechanics of a personal vs business savings account will be nearly identical meaning they work the same and the interest will be roughly the same. The difference maker here is actually in the LLC or business. The important piece here is the LL, which stands for limited liability.

If you own the home in the LLC (Or at least title it that way) and have all tenants paying into the business account you have effectively separated your finances from the businesses. You now have less likelihood of a tenant trying to sue you for your personal assets, bookkeeping is cleaner at tax time, and you have a business foundation that you can build over time including credit for the business, additional accounts for CapEx/Vacancies, etc.

TLDR: Use a business to do business.  All expenses paid by the business and all income to come to the business.

Hope this helps, feel free to follow up with questions, I know that was a big data dump.