Bank account for rental properties

[Alex M.]

So I am about to collect my first month's (plus last and security) rent on my first property - rental application in, background checks complete, initial deposit provided in the form of a check... but I don't have a bank account yet, other than my personal accounts. Is this a problem?

Is there any reason I should not just deposit these initial checks into my personal account and then work on getting a business account, or another checking account set up later on. Ideally, I would like to get the checks deposited ASAP to keep this moving forward, but don't want to get into any tax issues, etc that I am not aware of.

Also - second question is what types of banking arrangements do most landlords/investors have? Do you set up separate accounts for each property? Is it best to use a regular checking, or is a business checking better? Why?

Thanks!

[Ali Boone]

I agree about the separating for help with organizing your taxes, for sure. Even if not for the taxes, you at least want to be able to have a running picture of your income vs. expenses. I don't use my bank statements to help with taxes because I have a property manager on my properties so I send my accountants the year-end statement for all the properties, but if I were landlording myself, oh man I would definitely be referring to my bank statements (critical really, unless you want to do some major sifting). 

I wouldn't do a business account unless you actually have a business entity in place. Business accounts often have higher fees, for one. I send all my properties' income into one personal checking account separate from the others, and all the mortgages are paid from the same account. That way none of my personal normal money is touched in the process unless I want to withdrawal funds from it to play with.